A Status Certificate is a prospective condo owner’s best glimpse into the financial health and well being of their potential new home. This report gives all the goods on the current fees that owners’ pay, any large fee increases that may be on the horizon, and any liens or arrears owed by particular owner(s). Financial statements are part of the Status Certificate, too, and will show the trends in expenditures and receipts of the past, and provide comparisons of a corporation’s actual and expected costs.
A Status Certificate is vital to helping buyers make a more informed decision. It includes all by-laws, budgets, reserve fund balances, insurance and details on any major work that needs to be done to the building. The Status Certificate is also supposed to detail any legal actions taken or pending against the condo corporation and whether the insurance provides enough coverage.
As well, recent changes now oblige management to report the number of units in the complex that management is aware of being leased or owner-occupied.
Before buying, make sure you and your lawyer review the condominium’s Status Certificate. That way you can factor in your current and future monthly condo fees and determine whether the board is doing its job properly.
A written request to the condo board’s management company, and a $100 fee, puts a Status Certificate – including the by-laws, budget, financial statements and insurance certificate – in anyone’s hands within 10 days, as is required by law. Also, the request for the certificate no longer has to be made in the purchaser’s name.
It’s also a good idea for a seller to order a Status Certificate before listing their condo, and to understand what’s in it (as well as their realtor) because it’s very likely that any incoming offers will be conditional upon a review of it. Doing so will also save you the 10 days waiting period that it would take for the prospective buyer to get one. Depending on how far the closing date is (more than 60 days), the vendor’s lawyer may order a new Status Certificate.