Status Certificate 101.

Saturday Mar 07th, 2020


The below write up concentrates on Ontario rules but some elements and principals can be applied anywhere.

What is a Status Certificate.

Status certificate is a document that provides essential information regarding the financial status of the unit and the condo corporation.

What’s included in the Status Certificate.

Financial statements, budgets, special assessments, liens, arrears, lawsuits, condo declaration, by-laws, reserve fund study, insurance policy and claims, management contract, rules and minutes of the last annual general meeting, information regarding number of units leased, current fees for the particular unit, owner’s default, names and addresses of the directors, info regarding common expenses,  literally it will include hundreds of pages.

Who can request Status Certificate.

Anyone can request status certificate; it doesn’t have to be a seller or anyone interested in acquiring the unit. In practice it will be the seller (or the representative) requesting it and providing it to the interested parties. It’s common to provide the certificate once the offer has been accepted, in a hot markets and when multiple offers are expected the seller’s agent will often have the status certificate ready and provide it to the interested parties upon request, this way the buyer can submit the offer without status certificate condition once it has been reviewed by the lawyer.

Should my offer include the Status Certificate condition.

If you were not provided the certificate and your lawyer has not reviewed it to your satisfaction, your offer should include the condition, there is no good reason to purchase a condo without analyzing the status certificate first.

What to do once I receive the Status Certificate.

Immediately forward it to your lawyer for analysis. Your agent should have an understanding of the certificate but from my experience I can tell some agents don’t read it at all, and may not have sufficient understanding of it. Ensure your lawyer goes through the certificate in details and not just the summary page. Hopefully yourself after reading this you will have enough understanding to pick up the most important issues in the certificate which will give you an opportunity to ask your lawyer specific questions, and have them answered to your satisfaction. There is no legal obligation to review the certificate, and there is no requirement for the reviewer to be a lawyer but the real estate lawyers are best equipped to do so, however it would be risky and reckless not to do it. Even in the hottest seller markets the sellers are expected to provide the copy of the certificate.

How long does it take to get the Status Certificate.

The management company has up to 10 days from the time it was requested to provide the certificate, usually it takes few days.

Is there a fee for the Status Certificate.

Yes, the management company can charge around $100 per request, more if it’s a rush order. That’s why it is usually the seller who provides the certificate to the buyers instead of each buyer requesting their own copy.

How long is the status certificate valid.

The certificate if valid for 60 days.

How much is the fee to review the status certificate.

This will depend on the lawyer, in many cases the lawyers will include it the total fee for the closing costs for the transaction.

Who prepares the status certificate.

It is prepared by the property manager/management company.

Let’s try to go over the basics of a typical status certificate, and what to make of it.

I will not address every single issue but main highlights useful for anyone purchasing a unit.

Summary page.

As the heading indicates here is where you will find the summary of information, this a good starting point to analyzing the certificate, but it shouldn’t stop there.

What’s included in the summary:

  1. The summary will provide the address, unit number, which level, locker unit number and level (if applicable), parking number and level if applicable, the name of the corporation, in Toronto the name would usually be Toronto Standard Condominium Corporation No. XXXX.
  2. It will state the amount of monthly common elements fees currently due on the monthly basis by the unit.
  3. Mailing address of the corporation, name and address of the management company, names of directors of the corporation.
  4. It will state if the unit owner is in default of the common element fees.
  5. When the next payment for the common element is due and the amount due broken down for the unit itself as well as parking and locker if applicable.
  6. The amount of prepaid common element expenses for the unit (usually NIL).
  7. Will state if there are any amounts that the Condominium Act 1998 are required to be added to the common expenses.
  8. Budget – it will describe if the budget is accurate, if any common elements for the unit have been increased, or if any assessments have been levied against the unit.
  9. Reserve fund – the last audited balance and recent unaudited balance will be stated,

who, when and what type (class) did the reserve fund study. How much will be contributed to the reserve fund during the fiscal year, the amount of anticipated expenditures, and if the reserve fund is adequate. Are there any plans for increased to the reserve fund.

  1. Legal proceedings and claim – it will state if the corporation is party to judgments, proceedings, court orders, Tarion warranty claims.
  2. Agreements with owners related to common element changes.
  3. Leasing of units – here you will find out how many units have been leased and are not owner occupied.
  4. Insurance – will confirm if the corporation has all the necessary insurance coverage.
  5. List of attachments (declaration, budget, insurance, reserve fund, financial statements, lawsuits).
  6. Other such as notes regarding metered utilities, suit inspections, rights of person requesting the status.


The package should include the copy of the certificate of the insurance and it is important to ensure the coverage is sufficient, but I would suggest paying even more attention to insurance claims. Costs of insurance have been a hot topic lately as many buildings are faced with significant premium increased and special assessments for unexpected insurance premium hikes. If you see significant insurance claims (flooding for example), you can very likely expect increases in insurance premiums, which in turn will be reflected in increases in your monthly condo contributions. Insurance claims may also be an indicator of the built quality.




The lawsuits are not uncommon, the nature of the lawsuit needs to be analyzed. The most common claims and lawsuits are due to a person falling, in this case the issue is forwarded to the insurance company and not likely a red flag. What about the condo suing the developer? The corporation, given the enormous legal fees involved in the litigation, probably wouldn’t start the process for anything minor, minor issues would have been taken care of by Tarion if within the warranty, or simply repaired. It would most often be very serious issues to convince the condo board to try to go after the developer. If that is the case quite likely the built quality can be questioned, which in turn are likely to be translated in significant special assessments.

Construction liens.

                When the disputes with a contractor arise, the contractor may proceed with a construction lien. A lawyer specializing in construction liens would be needed to explain the ins and out of it, I would suggest looking at the amount of the lien, if the amount is negligible (let’s say $20,000 for a 500 unit building) it may not be a big deal, but what if the amount is $20,000 for a 5 unit corporation, you than may be faced with $4,000 special assessment per unit (plus legal fees etc), or a $500,000 lien on a larger condo? A lien can potentially lead to a lawsuit if not settled or resolved, pay attention to the amounts, and are the amounts significant from the perspective of this particular condo corporation.

Unit liens.

                If there is a lien on the unit (unpaid monthly fees for example), the seller will need to pay the fees and remove the lien before the property can be sold.


Units leased.

                The summary will include number of units currently leased, I think it is important especially if you are purchasing the unit for yourself, it is commonly known the people care more about their property when they occupy themselves, tenants quite often don’t care. I have seen condo buildings DT Toronto which are 90% leased, but also came across once which are 90% owner occupied, usually it is somewhere in between.


Reserve fund.

                The reserve fund, and the reserve fund study is a very important aspect of analysing the status certificate.

What is a reserve fund – reserve fund is accumulated as part of monthly common element fees for future major repairs, it is put aside in a safe investment vehicle (such as GIC) and will be used in the future when the windows or roof need to be replaced. The condominium act states the reserve fund study needs to be prepared by a qualified engineer. The report will typically include the summary, cash flow table, recommended annual contributions, balances at the end of the period, assumptions (inflation etc), recommended annual increases, and includes projected contributions and spending for the next 30 years. There isn’t a set dollar amount, that all depends on the individual corporation, it’s size, number of units, amenities, common elements etc. Here is a list of items worth looking at:

  • Comparison of the current balance of the reserve fund per financial statements versus the balance required per reserve fund study. The balance per financial statement should not be lower than the indicated balance per reserve fund study, if the balance per financial statements is lower it means the reserve fund is underfunded, this could lead to special assessments, or rapid increase in monthly fund contributions which leads to increase in condo fees.
  • Annual percentage increases, the increases should mimic or slightly exceed the inflation, high single digit increases for the next few years are not necessarily a red flag, anything more deserves a closer look. I am looking currently at the reserve fund report recommending 34% increases in the contributions for the next 3 years, that is definitely an indication that the reserve fund has not been funded properly, there have been more large repairs than anticipated, and the building simply wasn’t run properly.

It is worth noting that the reserve fund is for major repairs and maintenance, it is not for additions, for example of the condo owners agree to build a swimming pool or basketball court which did not exist before, the funds for these additional must not come from the reserve fund.

Financial statements.


The corporation should provide the latest available audited financial statements, it is important to distinguish the audited financial statements (which are prepared by independent certified accountant) from unaudited financial statements which may be prepared by the management company. The financial statements must be prepared annually.


As in a case of any financial statements you will find the summary, balance sheet, income statement, for a condominium you will find the statement of reserve fund (compare the ending balance with the reserve fund study), statement of shared facilities (if shared with other condo corporation), schedules of expenses, cashflow, and notes to financial statements.


Notes to financial statements are very important to understand, apart from description of the corporation, accounting policies and so on you may will find notes and comments regarding the adequacy of the reserve fund, loans and mortgages, lease obligations, contingencies, lawsuits, kitec or any other common industry issues affecting this particular building, conflict of interests and special assessments.

Reading the notes to financial statements will often give a good indication of the financial situation of the condo, and for people who don’t have accounting background it is simply easier to understand than going over the numbers.


Declaration and description.


Declaration is a collection of documents which allow the corporation to be formed, the documents are filed with the land registry office. The declaration is created by the developer (declarant) and outlines the common elements, your share of the condo common expenses.


Description document will describe what is owned by the unit, boundaries of the unit, boundaries of the building, dimension and shape of the units and common elements.


Understanding these documents is crucial because they address your rights and obligations, these documents are very lengthy and sometimes exceed 100 pages, and actually quite difficult to comprehend without understanding legal jargon.

By-laws and Regulations.


By-laws documents can as well be quite lengthy and complex, it describes how the corporation governs itself, must be consistent with the Act and declaration. By-laws do not come into force until they are approved by the majority of the owners and registered in the land registry office. By-laws deal with various matters: how the directors are elected, when the corporation can borrow funds, how the common elements are assessed, maintenance of common elements and units.


Regulations, another very important document, you should go through the rules and regulation documents in fine details to ensure they meet your requirements, quite often they are very detailed, the most common rules to watch out for are:

  • Pets – often restricting number, kind (often limited to cats or dogs), size (for example under



  • Short term rentals – well this topic deserves a blog on it’s own due to the amount of press is gets and the municipal regulations in Toronto. Many corporations require a minimum 1 year lease, there are only a handful of buildings (around 15 or so) in Toronto which allow short term rentals. On other buildings unfortunately owners are breaking the rules and the boards are not enforcing them. I know people who occupied the building which allowed short term rentals and had to move out due to hotel like atmosphere. On the other hand others are looking to make a profit on the short term rentals.
  • Smoking.
  • Parking and visitor rules.
  • Use of common elements rules.
  • Repair obligations, lockers usage, noise, and many more.
  • Responsibility of condo unit v responsibility of the corporation.

The board can make, amend or cancel the rule, when doing so the board much notify the owners before the rules come into effect, and provide all owners a written notice at least 30 days before it becomes effective. The owners who oppose the rule can stop or change it from becoming effective by calling the owner’s meeting.

In the status certificate you will also find instructions what needs to be done when the ownership is transferred such as providing your personal info to the management, if the unit is leased providing tenant info, regulations regarding booking and using elevators etc etc etc.

You will be advised about your responsibilities when undertaking any changes to the unit (my advise: consult the management any time you want to make any changes, even minor), quite often there will be regulations regarding (but not limited to) the type of flooring, electrical, plumbing, moving walls and so on. Another tip, make sure your offer includes the clause stating that the seller warrants there have been no unauthorized changes to the unit.

Special assessments.

They are never good, most often red flags but are they always deal breakers?

What is a special assessment: it means the unit owner will pay money in addition to the monthly common elements for a specific purpose (although the specific purpose may be as a generic as shortage in the reserve fund)

Some times the amounts are fairly small as the condo may elect to collect one-time special assessment in the amount of few hundred bucks instead of spreading it out as part of the monthly fees, other times the special assessments are in millions of dollars with each unit having to contribute more than $10,000. There are buildings I wouldn’t touch with a ten-foot pole, the best buildings will rarely if ever any special assessments, the once in the middle are most problematic because the buyer will need to assess the situation and decide if the risks are worth the rewards. Let’s look at kitec plumbing which was installed in many buildings and have already been replaced in the majority. Typically, the cost per 1 bedroom unit will be in the $5,000 range. The buyer may see a special assessment which already has been paid by the previous owner, has been spread out and added to monthly payments over a period of 1 year, or the corporation found out about the kitec recently and has just levied the special assessment or is getting quotes. In such case the buyer may assume that it should be a one-time event, it is not necessarily a sign of the building having continuous issues, and may be worth the risk and the cost.

On the other hand, a special assessment for a building completed less than 5 years ago related to the lawsuit between the corporation and the developer is probably a sign to run, not just walk.

You also need to take into consideration a budget plan for special assessments which has not been approved yet, it is a possible sign of issues which have been identified but the amount to fix them is not yet know.

Troubled buildings with slew and history of special assessments may not be insurable, financing may be difficult to obtain.

The Condominium Act allows for the legal fees related to litigations to be drawn from the reserve fund, the lawyers and their fees are expensive, if that happens expect special assessments to replenish the reserve fund for the amounts drawn to cover the lawyers.


Loans are other items which need to be analyzed, we have written another blog describing special assessments and loans to discuss them in more details.



Is MLS listing correct.

Another important aspect of the status certificate is to ensure the MLS listing actually matches the status, and is correct. I am sure it’s not hard to imagine (unfortunately) all kinds of mistakes happen once in a while in the listings, some quite trivial, typos, some serious and tangible to the point this will jeopardize the transaction. You and your lawyer need to ensure the monthly fees were listed correctly (being off by few bucks is not a big deal, but what if someone typed $494 instead of $949), the unit number is correct, the legal description is correct, parking and locker are indeed included and owned, etc etc etc.

I hope that after reading this you will have a better understanding of the document, at the very least you should know that the status certificate should be reviewed every time a condo unit is purchased, it should be reviewed by the lawyer, and you should make sure the lawyer is able to address any questions you have regarding the document, your lawyer shouldn’t simply glance over the summary of the document, and as always the more you know the better.


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