How do I get a status certificate?

Typically a condo’s status certificate is either provided through the selling realtor prior to you submitting an offer, or, a seller will be obligated to provide the status certificate to you within a specified time in your Agreement of Purchase and Sale.  However, it is important to know that the requirement to provide a status certificate is not a built-in provision to the standard OREA agreement template in Ontario, so it must be added as an additional provision by yourself or your realtor. 

Most management companies for condo corporations will not release a status certificate to a potential buyer without the seller’s consent, there is also a fee charged by the condominium for its preparation.  So a good practice is to have your agreement indicate that it is the seller’s responsibility to provide you, the buyer, with the full status certificate and its attachments within a timeline after right after the agreement is signed.  The agreement should also allow you to have it reviewed and give you the right to exit the agreement if you are not satisfied with what is disclosed.

When should I get a status certificate?

In every purchase of a condo, where a recent status certificate cannot be obtained prior to signing the Agreement of Purchase and Sale, the agreement itself should include a clause making the agreement conditional upon the receipt and review of the status certificate.  In most cases you will not be able to obtain mortgage financing without the bank receiving a favourable review of the status certificate from your lawyer.  The status certificate will also include copies of the condominium’s insurance certificate which is a requirement for funding most mortgages.  Therefore, as you may be reliant upon the seller obtaining the status certificate for you from the condominium, not having the right to demand the status certificate can jeopardize your ability to obtain mortgage financing and so your entire transaction.

You may also need a status certificate if you are planning to refinance your condo, especially if the refinance is with a new mortgage lender.  If you know the timing of your refinance, it is usually cheaper to order the status certificate in advance rather than to order it once the mortgage paperwork is given to your lawyer a few days before your mortgage closing.  The new lender may not agree to fund your mortgage until they know your lawyer has reviewed the status certificate.

Why is a Status Certificate Review Important?

A status certificate and its attachments are the main avenue a condominium discloses to potential buyers what legal, financial or engineering challenges the condo is expecting or in the midst of and what rules and budget decisions are already in place.  Therefore, the status certificate is an important way for potential buyers (and future members of the condo corporation) to know what to expect once they take ownership.

Our real estate lawyers will look for red flags in the status certificate’s disclosure that a buyer should be aware of. Some examples include defects known to the condo’s board occurring either in the unit or the condo’s common elements, planned common element fee hikes or impending special assessments which may not have been disclosed by the seller.  Issues such as impending lawsuits or legal judgments against the condominium corporation which may affect the corporation’s ability to maintain its current budget or exploding reserve fund contributions ordered in a recent reserve fund study which may cause fee hikes in the near term.