A status certificate is an important document that provides a detailed financial records and legal status of a condominium corporation. Typically for condos in the Greater Toronto Area, the buyer's agent requests a copy from the Property management company once an Agreement of purchase and sale has been agreed to by both parties.
If I expect multiple offers on one of my listings, I usually go ahead and order a copy prior to going live on MLS. This greatly reduces any friction during the offer process.
Expect it to take less than 10 days to receive a zip file but if you don't mind being extorted by the management company, you can pay double and get in less than 48 hours; which sadly I almost always do.
In Ontario, a status certificate is only considered valid for 30 days from when it was issued so make sure you note the date of issue.
What's In A Status Certificate?
It may sound like something you hang on your wall to show off to your friends but in reality, a status certificate is dozens of pages long and comes with many different files outlining the condo corporation's financial health, rules and regulations, and any pending lawsuits or legal issues that may affect the unit or the building.
As well, you will find information about the unit itself, such as its size, features, maintenance fees, arrears, by-laws, budget, reserve funds, insurance, and any special assessments that may be applicable to a buyer.
If there are known defects like Kitec Plumbing or pending special assessments in the building it will appear in the status certificate and the buyer shall have the option to proceed with the sale or not.
Why Is It Important?
Status certificates are an essential document to review before purchasing because they provide transparent information regarding everything a buyer "ought" to know before purchasing a condo. DO NOT, under any circumstance submit an offer without having your lawyer review the Status Certificate first. You just never know what will show up in the reports.
For example, I wrote an offer conditional on status review where the seller had not paid their condo fees (or property taxes) for two years. It showed up in the status certificate and after a title search we realized there wasn't enough equity in the property to cover what was owed. The seller was not in a position to cover the shortfall so we restructured the deal to make creditors whole and allow my client to close as planned.
Thankfully, we avoided a VERY litigious closing day.
By having your Realtor (me) insert a well-worded status certificate clause your interests as a buyer are protected and can proceed with your purchase knowing your new home is in good standing for the foreseeable future.
I make the move to Toronto, Durham region and surrounding communities smooth and easy for my clients. If you are contemplating a move, contact me today by text/phone 647-457-4347 or in the chatbox on your screen.