- A status certificate discloses the unit’s and the corporation’s financial and legal position.
- The reserve fund study and the corporation’s funding plan are the most predictive parts.
- Special assessments and pending litigation are the two disclosures that most often change a decision.
- Review should be a condition of the offer, with enough time to obtain and read it properly.
What it is
A status certificate is a package the condominium corporation must provide on request, within a prescribed period and for a prescribed fee. It sets out the financial and legal position of both the specific unit and the corporation as a whole.
It is the buyer’s main window into what they are actually acquiring, because a condominium purchase is a purchase of a share in a collective enterprise as much as of a unit.
The unit-level disclosures
Whether common expenses for the unit are in arrears, and by how much.
The current monthly common expense amount, and whether an increase has been approved.
Whether the unit is subject to any special assessment, levied or contemplated.
Whether the corporation has any claim against the unit owner, and whether the unit complies with the declaration, by-laws and rules, unauthorised alterations being a frequent issue.
The corporation-level disclosures, and what they signal
This is the part that predicts future cost.
Reserve fund and reserve fund study. The reserve fund pays for major repair and replacement of common elements. The study projects what will be needed and when. The question is not simply how much is in the fund but whether the funding plan is adequate for the projected work. A large building with an ageing envelope and a thin fund is a future special assessment.
Budget and financial statements. Look at whether the corporation is running deficits, and whether common expenses have been held artificially low.
Legal proceedings. Litigation the corporation is involved in, which can be a substantial contingent liability. Construction deficiency claims against a developer are common in newer buildings.
Insurance. The certificate of insurance and, importantly, the deductible, since owners can be responsible for damage originating in their unit up to the deductible.
Governing documents. The declaration, by-laws and rules, covering pets, short-term rentals, alterations, parking and storage. Buyers frequently discover a restriction after closing that they would have treated as decisive.
Warning signs
Several patterns justify closer attention: a reserve fund materially below what the study recommends; a recent or contemplated special assessment; significant litigation; frequent turnover of property managers or directors; a high proportion of units in arrears; and a building with known systemic issues such as envelope or plumbing failures.
None is necessarily disqualifying. Each is a reason to understand what is coming and to price it.
Timing and the condition
The corporation has a prescribed period to produce the certificate after a request and payment. The offer condition must allow enough time both to obtain it and to have it reviewed.
A condition of two or three days is often too short in practice, because the clock does not start until the request is properly made and paid for.
The certificate speaks as at its date. A certificate obtained months earlier for a different transaction should not be relied on.
Reviewing it properly
The package is long and largely boilerplate, which encourages skimming. The parts that matter are the reserve fund study and funding plan, the financial statements, any disclosure of special assessments or litigation, the insurance deductible, and the restrictions in the governing documents.
A lawyer’s review is directed at exactly those, and at whether anything in the package is inconsistent with what the buyer has been told.
Common questions
Who pays for the status certificate?
The buyer typically pays the prescribed fee, though it can be negotiated in the agreement.
Can I waive the condition to strengthen my offer?
You can, and buyers do in competitive markets. It means accepting the corporation’s financial position sight unseen, including any special assessment.
What if a special assessment is levied after closing?
Responsibility generally depends on when it was levied and what the agreement says. Where a certificate disclosed a contemplated assessment, a buyer who proceeded has limited recourse.
Does a new building need one?
Yes. New buildings carry their own risks, including reserve funds not yet tested by real costs and potential construction deficiency claims.
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