Status certificate스테이터스 서티피케이트 (콘도 상태 증명서)

What is it?

A status certificate is a "current state" report that the condo corporation writes about one unit. It shows the unit’s fees and whether any are unpaid, the building’s finances (budget, reserve fund), lawsuits, insurance and the rules, all in one package.

Section 76 of the Condominium Act sets what it must contain, and it is issued on a CAO form approved by the government. It is dated, and the information is as of that date. Anyone can request one, but in practice it is almost always ordered for a buyer of a resale condo.

There is no such document when you buy a freehold house. A condo means buying into the finances of the whole building, not just your unit, so this document is the heart of a condo purchase.

What is in it?

Section 76 (1) of the Act and section 18 of the regulation (O. Reg. 48/01) list the contents. The package often runs from dozens to more than a hundred pages.

• Money: the unit’s common expenses and any default, whether a certificate of lien is registered, any fee increase declared since this year’s budget and the reason, any special assessment levied on the unit to top up the reserve fund and the reason, and anything the corporation knows that may increase the unit’s fees.
• Building finances: this year’s budget (and any expected surplus or deficit), the last audited financial statements and auditor’s report, the latest reserve fund study and the fund balance (as of a month-end within 90 days of the certificate), and the notice of future funding and whether the plan has been implemented.
• Legal matters: all outstanding judgments against the corporation and every lawsuit it is a party to, whether a court has appointed an inspector or administrator, and any outstanding Tarion warranty claims.
• Documents: the full current declaration, by-laws and rules, a list of current agreements such as management and shared facilities agreements (with the right to examine them), and any common-element change agreements that bind the unit.
• People: the corporation’s address for service, the names and addresses of directors and officers, and the name and contact of the management company or manager.
• Other: a certificate of each current insurance policy, substantial changes to the common elements that the board has proposed but not yet made, the number of units leased in the last fiscal year, and any planned electric vehicle charging installation.

Fee and deadline

The fee, with all required attachments, cannot be more than $100 including taxes (O. Reg. 48/01, s. 18 (4)). If you are asked to pay more, check with your lawyer or the Condominium Authority of Ontario (CAO).

How it is used in a deal

1. Put a "status certificate review condition" in your offer. Usually the seller orders the certificate, and the buyer reviews it with a lawyer within a set number of days after receiving it. The number of days and who orders it are whatever the contract says.
2. Your lawyer reads the whole package, looks for the red flags below and explains them. You can ask the corporation to examine and copy any agreement listed in it (s. 76 (7) and (8)).
3. If you are satisfied, you send a notice of fulfillment or a waiver and the deal becomes firm. If there is a problem, you end the deal within the deadline and get your deposit back. Exactly when you may walk away depends on the wording of the condition, so check it when you write the offer.
4. A pre-construction condo has no corporation yet, so you review the builder’s disclosure statement instead. For an assignment or a brand-new condo just registered, the certificate may be short or hold little history.

Red flags your lawyer looks for

• Unpaid fees or a lien on this unit: if the seller does not clear it before closing, it becomes your problem.
• A special assessment already levied or planned, or a statement that the corporation knows of circumstances that may raise fees: a large bill may be coming.
• A reserve fund below what the reserve fund study recommends, a funding plan the board has not implemented, or a statement that the fund is not expected to be adequate this year.
• A budget deficit, points raised in the auditor’s report, or money the corporation has borrowed.
• Lawsuits: a case against the corporation (construction defects, an accident) can mean legal costs and special assessments. A case by the corporation against the developer needs to be read closely.
• A missing insurance certificate or narrow coverage. Check what your own condo insurance must cover (the standard unit definition).
• Rules or declaration terms that clash with your plans: pet limits, bans on short-term rentals, minimum lease terms, renovation limits, parking and storage rules.
• Shared facilities agreements (a pool or garage shared with the building next door) and how costs are split, and the terms of big management contracts.
• A high share of leased units: not a problem in itself, but relevant to some lenders and to how the building feels to live in.

Legal effect: it binds the corporation

The certificate binds the corporation, as of its date, for everything it says (or is deemed to say) toward a buyer or mortgage lender who relies on it (s. 76 (6)). If required material information is left out, the certificate is deemed to state that there is no such information (s. 76 (4)).

The CAO points to a Superior Court of Justice decision that let a new owner skip their share of a special assessment because the corporation had not clearly noted the possibility in the certificate. So corporations must disclose a risk of fee increases as soon as they know of it, in clear language.

The flip side: a problem clearly stated in the certificate is one you bought with your eyes open. Never waive the condition without reading it.

Example

Things to watch

• The certificate speaks as of its date. An old one (for example, ordered months ago for another buyer) misses anything that changed since. Your lawyer may insist on a fresh one.
• Do not be scared off by the thickness. Along with your lawyer’s summary, read the use restrictions in the declaration, the rules, the budget and the reserve fund pages yourself.
• It says nothing about the condition inside the unit (leaks, broken appliances). Inspect the unit itself, and get a home inspection if you want one.
• On closing, the month’s fees are split by date on the statement of adjustments, and any arrears must be paid off by the seller.
• Budget the $100 fee as one of your closing costs, separate from your lawyer’s bill.