What is a Status Certificate when purchasing a Condo/Condo Townhome?

condo-status-certificateWhy Is a Status Certificate so Important?

The status certificate is a document, as per Section 76 of the Ontario Condo Act, that provides basic and essential information concerning the financial status of a unit and of the condo corporation. Its main focus is to inform a prospective owner of the fees, of any large increase that is going to come into effect, of any special assessment that is being contemplated by the board, and any arrears or lien that a particular suite might have.

In addition, it contains the condo declaration, by-laws, budget, reserve fund, insurance, management contract, rules, minutes of the last annual general meeting, and mention of any lawsuit involving the corporation. his certificate can run into one hundred pages.

The purpose of status certificates is to allow potential buyers of condo units to have as much information as possible about their unit as well as the physical and fiscal situation of a building. Certificates also allow prospective owners to find out what the rules are, including whether pets are allowed.

Status certificates are ultimately boards’ responsibility. Many board members are unaware of this responsibility because this certificate is generally prepared by management companies. It is a good idea for board presidents to check the contents of status certificates, at least once a year, and to do so when the fiscal structure of a condo is about to change or has changed.

Obtaining A Certificate

Who can obtain a status certificate? Anyone can, in theory. However, each unit’s certificate may have slightly different contents because a certificate always lists arrears and changes in the exclusive-use common elements made with board approval, for instance. Therefore, in practice, owners who are selling and prospective buyers are the ones who obtain a certificate. Or their lawyers, or real estate agents, or a bank.

One can only presume that, if there is a case of identity theft that is suspected by management, they will refuse to deliver a certificate. Simple curiosity about a suite may not be an acceptable reason to obtain a certificate, but I am not aware of what decision this would entail on the part of management.

Persons who request a status certificate should receive it within 10 days after they have applied and paid for it. The request should be made in writing–in order to protect the owner. (See below.)

Generally, the fee for the status certificate ($100 + HST) is paid to the management company if it is so stated in the management contract. However, one president and his board have renegotiated their contract with the management company: The fee will now go to the condo corporation.

What to do if the Manager does not provide a Status Certificate?

You can still try to sell your unit. Prospective owners should be informed that, when a status certificate is not forthcoming, it should be taken to mean that “everything is fine.” Therefore, if the new owner finds out that there was a special assessment right after moving, he or she does not have to pay it.

However, it is suggested here that sellers who have requested a status certificate keep a copy of the requesting letter and provide a copy to the buyer for legal purposes later.