Looking to purchase a condo? You’re going to want to get your hands on an up-to-date copy of the status certificate!
What is a Status Certificate?
A status certificate is much more than a certificate – it is a lengthy compilation of documents, as per Section 76 of the Ontario Condo Act, that outline essential information concerning the unit and condo corporation, such as the condominium’s declaration (outlining the building’s by-laws, rules and regulations), insurance details, financial statements, and summary of the reserve fund study. A status certificate also discloses information about any legal issues or proceedings, and upcoming repairs or maintenance.
Why should I be concerned about the content of the Status Certificate?
Since you’re purchasing a unit in a building (or group of buildings) and not an entire property, it’s a good idea to see how things are being managed! Status certificates can be upwards of 100 pages long and it is important to enlist an experienced Realtor and real estate lawyer to review it and identify any potential red flags, such as a lawsuit or lien, unbalanced budget or depleted reserve fund. If you are purchasing in an older building or complex there’s a greater chance of repairs or replacements which can mean increases in monthly maintenance fees and in some cases, special assessments (additional payments that a condo board has to impose when unexpected shortfalls or expenditures occur in the budget, or when an expensive system has to be replaced and there is not enough money in the reserve fund to cover it). Status certificates will also outline information pertaining to your enjoyment of the unit and common areas including rules and regulations around pets and building amenities, so you’ll want to make sure that their by-laws and regulations are a fit for you.
Who prepares the Status Certificate, and how do I get a copy of one?
Status certificates are the responsibility of the condo’s board of directors and can be obtained through the condo’s property management. Many offers on resale condos are conditional upon the review of the status certificate by the buyer and their lawyer. A reserve fund study is commissioned every three years, so it is important that you obtain the most recent, up to date copy of the status certificate. Further, each unit’s certificate may have slightly different contents. Anyone can request the status certificate; however simple curiosity is not an acceptable reason to obtain a particular unit’s documents. In practice, owners who are selling and prospective buyers, or their lawyers, Realtors, or banks, are the ones who request a status certificate. There is a nominal fee (generally $100-300), and you can expect to receive the certificate within up to 10 business days.
This seems like a lot of hassle – why would I purchase a condo instead of a freehold?
Condominiums are a great option for buyers who are looking to own a home without worrying about maintenance (both daily maintenance and longer-term maintenance)! They can also provide great amenities not offered by traditional freehold homes, including gyms, pools, party rooms, 24-hour security, convenient concierge services, and more. Finally, since you’re sharing costs amongst many other (sometimes hundreds!) owners, a condo can be a cost-effective alternative to freehold ownership.
Curious whether condo ownership is right for you? Contact us for more information!