gradient box – do not remove it
On behalf of Property Law Firm CB LLP on August 9, 2018.
A status certificate is an official document issued by the condominium corporation that provides a snapshot of the building’s financial, legal, and operational health.
Under Ontario’s Condominium Act, 1998, the corporation must deliver this document within 10 calendar days of receiving a written request and fee. The certificate contains critical information about monthly condo fees, the reserve fund’s strength, any pending legal actions.
All of which help you assess whether the condo purchase aligns with your financial situation and lifestyle.
After looking at all home-buying options, you finally decide that a condo is the best fit for your current lifestyle. Condos have been rising in popularity for a number of reasons.
Many first-time home buyers can afford them, they often provide added amenities like a pool or gym, and outside upkeep and maintenance are typically handled for you.
However, with these pluses come some issues of which you should be aware. There is something that comes along with a condo known as a status certificate.
This document, which should be as current as possible, will provide you with details not only about the condo corporation, but also about the fees you will likely be paying.
Answers to some important questions
A status certificate contains important information, and your condo corporation should provide you with the most up-to-date version. Once it has been provided to you, an experienced lawyer can help you review your certificate by carefully walking you through some of the details listed within it, including the following:
- Whether the seller has been paying his or her condo fees regularly
- What condo fees you will be responsible for paying and what these fees will be covering
- The financial health of the condo corporation
- Information on lockers and parking spots
- A rundown of the corporation’s rules, bylaws and declaration
- In some ways, a status certificate is akin to an inspection on a single family home. It may either reinforce your decision to buy the condo or it may make you scratch your head and reassess your decision.
Rules and other points to ponder
When you buy a condo, you will have to abide by the rules of the condo corporation. They can include things like whether you can have a pet and its size limitations and what kind of furniture you can have on your balcony.
Some rules can get really sticky, even those regarding things like your décor. If you have a problem with any of the rules, you might wish to rethink things before proceeding.
Status Certificate vs. Property Inspection: What’s the Difference?
| Focus Area | Status Certificate | Property Inspection |
|---|---|---|
| Coverage | Entire building’s financial and legal health | Physical condition of your specific unit |
| Provided by | Condo corporation | Licensed home inspector |
| Cost | Up to $100 | Typically $300-500+ |
| Key information | Fees, reserves, litigation, bylaws | Roof, plumbing, HVAC, structure |
Read the fine print
Thoroughly reviewing the information a status certificate contains before moving forward may prove invaluable to your future best interests.
There are resources readily available to help you gain a greater understanding of the sometimes confusing and complex legalities involved with a potential real estate purchase.
An Ontario real estate lawyer can answer all of your questions and concerns while protecting you from many common oversights that happen all too often during the process of buying a home or condo.
Frequently Asked Questions
1. How long does it take to get a status certificate?
Once the condo corporation receives your written request and the $100 fee, they have 10 calendar days to prepare and deliver the complete status certificate package. Start this process early in your offer period, as some corporations may take the full 10 days.
2. What if the status certificate shows a special assessment?
A special assessment means the corporation has determined that owners must contribute additional funds beyond regular monthly fees to cover major repairs or unexpected costs. This is a significant financial obligation. Review the assessment details with your lawyer and factor it into your budget before finalizing your purchase.
3. Can I use the status certificate as grounds to renegotiate the offer price?
Yes. If the status certificate reveals significant financial problems, pending litigation, or a severely underfunded reserve, you may have grounds to renegotiate the price or walk away, depending on your offer conditions. This is why building a status certificate review contingency into your offer is important. Your real estate lawyer can advise on whether the certificate supports renegotiation.
4. What happens if the corporation doesn’t provide the status certificate on time?
The status certificate is as essential to a condo purchase as an inspection is to a single-family home. Taking time to understand what it contains and addressing concerns with a qualified real estate lawyer before you commit can protect your investment and help you avoid costly surprises after closing.
5. How long does it take to get a status certificate?
Once the condo corporation receives your written request and the $100 fee, they have 10 calendar days to prepare and deliver the complete status certificate package. Start this process early in your offer period, as some corporations may take the full 10 days.
