- STATUS CERTIFICATE - 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.
- 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.
====================================================
BE SURE YOU RECEIVE AND REVIEW YOUR COPY TO THE STATUS CERTIFICATE BEFORE CLOSING A PURCHASE AGREEMENT
====================================================
STATUS CERTIFICATE
- When you are selling or getting a new mortgage for your unit a Status Certificate is required. This tells prospective buyers of the bank about the health of the condominium Corporation and your unit. The Status Certificate consists of the following documents as per the Condominium Act and any revision.
- 1. Status Certificate
- 2. Budget
- 3. Financial Statement
- 4. Reserve Study
- 5. Insurance Certificate for condominium coverage
- 6. Copy of the Corporation’s Declaration, By-laws and Rules
- 7. Unit common element deficiencies.
- The Status Certificate is time sensitive. It is only good for 90 days before a new one is required. Please wait until you have an offer before requesting one.
- There is a fee charged for this service.
- The fee is decided by the Condominium Act.
- Current fee is $100.00 Plus HST = $113.00.
- The corporation has 10 days from the time of the request; but, it may be done sooner than that depending on certain requirements.
- One of the requirements is an inspection of the exterior common elements of your unit by the condominium or property manager for any deficiencies.
- When requesting a Status Certificate, please have the buyer’s name, lawyer’s name and their contact information available, if possible.
===========================================================
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.
- Often, the issues and language contained in a status certificate can be complex. It is advisable, therefore, to obtain the assistance of a real estate lawyer and an accountant to determine the potential legal and financial consequences.