What Is the purpose of a Status Certificate review?

If you're looking to buy a condo in the GTA, you'll almost certainly hear about the Status Certificate, and your Realtor will almost certainly advise you to make your offer contingent on your lawyer reviewing the Status Certificate.
 
A status certificate is a large document that contains information about a condominium corporation's financial and legal health. It normally runs a few hundred pages and covers key laws, regulations, rights, and responsibilities that every condo owner should be aware of. This might be a significant consideration when purchasing a condominium. Buildings with a high owner-to-resident ratio are less likely to have troubles and are better maintained.
 
What Is the purpose of a Status Certificate review?
When you make an offer on a condo, it is likely that your lawyer will condition it on an examination of the status certificate. You'll usually set aside 2 to 5 days for your lawyer to go over all the agreements and make sure you're not buying into a legally or financially problematic condo complex.
 
The status certificate can be ordered by the home buyer or seller that will cost $100 in Toronto, and the condo corporation/property management has 10 business days to furnish it.
 
In order to advance the mortgage at closing, your bank or lender will also need a copy of a current status certificate that is less than 30 days old.

What are some contents of the Status Certificate?
 
About the Condominium Building
  • Legal description of the unit, as well as any parking and locker information.
About the Condominium Building
  • Legal description of the unit, as well as any parking and locker information.
About the Condo
  • Board of Directors and Property Managers contact information.
  • Whether the unit's monthly maintenance expenses are current or past due.
  • If the unit or building has any special assessments.
  • When additional monies are needed to pay for repairs, budget gaps, or to enhance the reserve fund, a special charge is sometimes imposed on condominium owners.
Financial Situation
  • Information on finances and insurance.
  • A duplicate of the present budget.
  • Details on any current-year increases in common elements or special assessments.
Insurance and Agreements
  • For the building, a certificate of insurance is required.
  • Are there any requirements for individual property owners to obtain unit or liability insurance?
  • A list of all agreements to which the building is a signatory, for example - management agreement, rental agreements.
Reserve Fund
  • Every month, a percentage of each common element fee is paid into the reserve fund. Having enough money in the reserve fund is critical to maintaining a financially sound condominium corporation.
Condo Corporation
  • Details of any judgments against the corporation are listed in the Legal Information section of the Status Certificate.
  • Are there any pending lawsuits?
Rules, Bylaws and Regulations
  • Pet limitations, rules for visitors and parking, renting out your unit are all examples of what will be included in this section of the Status Certificate.

 
What happens if missed information appears after closing?
If the information is not contained in the status certificate and the buyer discovers after closing that the common expenses would skyrocket or that a special assessment will be imposed, the buyer has the option of refusing to pay or filing a lawsuit against the condominium organization.
 
Can I waive the Status Certificate review?
The condition of waiving the Status Certificate review might be quite dangerous, especially in the present GTA real estate market. Buyers may be tempted to waive the condition in order to get a condo, but the significance of the status certificate should never be overlooked.
 
As you can see, a status certificate lays out all this information and more for you up front, so there are no unpleasant surprises later on. This is why working with your realtor to make sure your offer is conditional on a legal assessment of the status certificate package is critical.
 
If you have any questions about the Status Certificate or are interested in buying or selling a condo in the GTA, Faraz Azam is happy to help, click here to get in touch with him today!

 
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