What is a Status Certificate?
A Status Certificate is a document that discloses certain information about a specific condominium unit (dwelling, parking, and locker units, as applicable). The Status Certificate includes a package of documents outlining the current financial and legal “health” of the unit(s) and building, and the rules and regulations unit owners must abide by. The package contains important information that should be reviewed by a lawyer before presenting an offer or during the conditional period.
Do I need a Status Certificate?
Yes, for your own due diligence! If you are purchasing a resale condominium unit, you should obtain a Status Certificate for your lawyer’s review. Reviewing the Status Certificate is part of your due diligence. It lets you know if there are any issues that need to be rectified. If a lawyer reviews the Status Certificate before an offer is presented or during the conditional period and finds a red flag, this is the best time to address it. Depending on what is discovered, this gives you the opportunity to amend or rescind your offer.
Yes, for your lender/title insurer’s required due diligence! Your lender (and the title insurer) will want the Status Certificate to be reviewed by your lawyer, and for your lawyer to confirm there are no red flags. The lender will not advance funds for your mortgage, and the title insurer will not insure your transaction, without this.
How much does it Cost? Where do I get one?
Under the Condominium Act, 1998, the cost of a Status Certificate is $100.00 + HST and must be delivered within 10 days. The Status Certificate is ordered through Property Management, who may charge additional fees if you are requesting a rush certificate, based on the timelines their office has for drafting and issuing the document.
Condominium Rules/Lifestyle Restrictions
The condominium documents will also outline any rules or lifestyle restrictions. Some of the more common ones include restrictions surrounding pets, the use of barbeques, and leasing the unit on certain platforms (Airbnb, Vrbo, etc.). Rules often impact lifestyle choices which are typically not legal issues reviewed by a lawyer. If you think a specific rule may apply to you, please let your lawyer know as soon as possible so they can determine if/how it applies to you.
Owned vs. Exclusive Use Spaces
Oftentimes, individuals purchase a parking and/or locker unit with their dwelling unit. There are two types of ownership when it comes to these units: owned and exclusive use.
If the unit is owned, it is a separate piece of land/property from the dwelling unit. The parking/locker unit will be registered in your name on closing, on a separate deed, so it can be sold or leased separately (subject to any Condominium Rules).
If the unit is an exclusive use space, it is not a separate piece of land and will not be registered on a deed in your name on closing. Rather, as the owner of the dwelling unit, you will have an exclusive license/right to use the parking/locker unit. Exclusive use spaces run together with the dwelling unit and cannot be sold or leased separately.
By reviewing the Status Certificate, your lawyer can confirm whether your parking and/or locker unit is owned or exclusive use.
What Red Flags could you find?
Below is a non-exhaustive list of common red flags that may be discovered during our review of a Status Certificate.
- Is the Condominium Corporation suing or being sued?
- How can this affect you as the owner?
- Arrears in common expenses
- If the unit’s common expenses are not paid up-to-date, the Condominium Corporation can register a lien over the property.
- If a lien is registered on title, it can be enforced and may affect your financing, your right to vote at meetings, etc.
- Financial Statements
- Does the Condominium Corporation have an adequate reserve fund?
- Are there greater liabilities than assets?
- Special assessments
- Will you be required to pay an amount above and beyond that of the common expenses?
- Has the current owner paid their share of the special assessment in full?
- Outdated status certificate
- Should be as close to the current date as possible.
- If dated more than 90 days before your closing date, you will need to obtain a new one.
We would be happy to review the Status Certificate for your next purchase or refinance transaction. Following our review, we will provide you with a comprehensive written report of our findings. Please do not hesitate to contact us at (416) 203-6347 or firstname.lastname@example.org if you have any questions. We invite you to try our easy-to-use Closing Cost Calculator. We look forward to working with you!
Written by Ariana Serapiglia, an Articling Student at We Are Law.