What is a status certificate?

A status certificate is a document provided by the condominium corporation to buyers of resale condos that provides a snapshot of the unit as at the date that the certificate is issued. In most cases, if the building is serviced by a property management company, it is prepared by the property manager. The certificate must be given to the prospective buyer within 10 days of the date of the request, and the Condominium Act allows for a $100 fee to be charged for the status certificate. Real estate matters such as status certificates can be complicated. To get help, ask a lawyer now.

A status certificate contains pertinent information about the individual condominium unit. Among other things, the certificate would indicate if the current unit owner is in default of paying the monthly common expenses, if an increase in the common expenses has been declared by the condominium board, and the amount in the reserve fund.

Information that needs to be included in the certificate is specified in the Act. For example, the status certificate should contain:

• the names and addresses of directors and officers of the corporation,
• information regarding common expenses for the unit,
• any special assessments that may have been levied by the condominium board,
• management contract,
• insurance,
• minutes of the last general meeting,
• copies of the condominium declaration, by-laws and rules,
• a current budget for the condominium corporation, and
• a copy of the most recent reserve fund study. The study should state the amount in the reserve fund, within 90 days of the date of the status certificate, and any plans to increase the reserve fund.

Any additional legal issues that may affect the condominium will also be included in the status certificate. For example, the certificate should state whether there are any judgments against the corporation, and if the condominium corporation is a party to any litigation already underway. If a legal action has not been commenced, the status certificate may be silent on this matter.

It is important to note that alternative dispute resolution, such as mediation and arbitration, might not be considered legal action, and therefore not be included in the status certificate. Consequently, the cost of the mediation or arbitration, and the potential liabilities resulting from the outcome will not be available in the status certificate. In some cases however, the cost of mediation and arbitration may be reflected by a declaration of special assessments.

Why should I get a status certificate?

The status certificate is the one document that will give prospective buyers details of the financial and legal circumstances of both the condominium building and the particular unit they are interested in. A status certificate is also an important document for those lending money to finance the condominium unit.

In almost all cases, buyers and lenders will order a status certificate as it will disclose additional or unanticipated liabilities. In fact, many prudent vendors will also order a status certificate when they list their unit. By doing this, they have it readily available to give to a purchaser who is keenly interested in the unit. Although it will have to be updated to assure the purchaser that there are no changes since the time of the issuing of the status certificate, much of the information will remain the same and is available to help the purchaser make a faster decision.

As mentioned, a status certificate will include information regarding increases in the common expenses and if the building is being sued, as well any large expenditures for repairs. A buyer should pay particular attention to the reserve fund of the condominium corporation and ensure that there are sufficient funds to cover any ongoing maintenance and repair of the condominium’s major capital items. To do this, the Agreement of Purchase and Sale should be conditional on the purchaser receiving a status certificate, having a few days to review it, and being satisfied with its contents.

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Real estate matters involve large sums of money and complicated legal issues. To get help, ask a lawyer now.

								
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