The Status Certificate (once referred to as an Estoppel) is a document that reports on the financial and legal health of a Condo Corporation and includes an overview on the entities that oversee the Corporation.
It is governed by the Ontario Condominium Act and is usually a few hundred pages long with crucial information for you to understand. To get a copy of the Status Certificate from the building’s property management, you’ll need to order it in writing and pay a fee of $100. The certificate must be provided to you within 10 business days from the order date.
When you put in an offer on a condo, among other conditions you’ll include one to review the status certificate. This will give you a chance to pull the report and have your lawyer review it. There are a lot of unknowns and unforeseeable outcomes when purchasing a condo. Be certain to hire a competent real estate lawyer who is experienced in closing condo sales and reviewing status certificates. This is one of the most important steps of doing your due diligence as a potential buyer.
Information to Expect in the Status Certificate
Financials & Reserve Fund
- A copy of the most recent reserve fund study (redone every three years, outlining all parts of the building a corporation needs to replace or repair on a timeline).
- Usually 20-30% of the monthly condo fee is paid into the reserve fund for emergency repairs and improvements. Your lawyer will address if the reserve fund is adequate.
- The most recent budget for the Condo Corporation.
- Replacement plans for expensive projects will be outlined, these items could include roof, HVAC, elevators.
- Financial audit from the previous year.
- Is the current owner in default of any common element fees?
- Sometimes there are mistakes in the MLS listing and your lawyer will confirm the fees you are agreeing to in the Agreement of Purchase & Sale are accurate and exactly what they cover.
- Outline of any planned increases and additional details about the history of increases in the building.
- Why are some fees so low? If you are buying into a small, self-managed building with low fees, chances are it’s too good to be true.
- Maintenance fees will rise over time. Are you buying a newly-built condo? Expect the condo fees to substantially increase in the first two years to reflect the actual maintenance costs.
- Special Assessments is a levy on condo owners when extra funds are required to pay for repairs, budget shortfalls or boosting the emergency reserve fund. They can be one-time costs ($10,000/unit) or can be extended over a number of years ($200/month over the next 3 years).
- Are there any pending lawsuits, including judgements both against and by the Condo Corporation?
- Frivolous lawsuits or ones that will be covered by insurance (slip and fall) are not typically show stoppers. Lawsuits by the Condo Corporation could be problematic if losing means it could end up costing you more.
- Is there enough money in the reserve fund to pay for the legal fees and proper insurance to pay for any negative outcomes?
Bylaws & Rules
The Condominium Declaration outlines the building’s by-laws and rules, which directly impact how you can use your unit and building.
- Visitor rules and visitor parking.
- Parking and locker rules, can you rent to someone from outside the building?
- Balconies and terraces, are you able to have a BBQ?
- Alterations or renovations to your unit including what kind or colour of window colourings.
- Pet restrictions [Read: ].
- Noise and smells.
- Bike rules.
- The Condo Corporation is responsible for covering the building itself however you are responsible for your own insurance policy. Identifying the exact type of coverage that the building has will help with your decision in purchasing insurance.
What’s Owned, Exclusive or Assigned
- Parking spaces and lockers can be owned (you can use them or sell them separately from the condo), exclusive (you can use them and pass on the rights to the next buyer) or assigned (there for your use).
- Is renting allowed and what is the building’s owner to renter ratio? Generally, if there is a higher number of owner-occupied units it is more likely that the building is better maintained. Buildings that are owner-occupied are often more desirable and appreciate at an accelerated rate.
- Are there rules and guidelines surrounding short-term rentals, such as Airbnb’s? Most condos have a minimum term requirement of 6 months.
- Kitec plumbing was commonly used in constructing houses and condos in Ontario between 1995 and 2007. It can become an issue as some owners have experienced issues and flooding. The Status Certificate will disclose the presence of Kitec plumbing and what action the Condo Corporation has or will be taken. [Read: What is Kitec Plumbing?]