Tag: Buy a Condo

The past decade has seen a considerable increase in the number of condominium developments in Southern Ontario. As the population continues to grow, condos are a great way to efficiently use scarce land in major cities. The price point of condos is often much lower than that of detached homes, which makes them a popular choice among first-time homebuyers. Condos have also become common among more experienced homebuyers who are looking to downsize or perhaps are spending more time abroad and prefer the added security and included maintenance of a condominium. Many buying a condo for the first time may question if the buying process and condo ownership is different from that of a detached home. The answer to that is yes, and there are a few items in particular that a condo buyer should be aware of. In today’s post we will focus on the importance of reviewing a condo’s status certificate.

As per the Condominium Act, 1998, SO 1998 c. 19, when a condominium development is registered in Ontario, a special type of corporation is created – one without share capital. The objects of the corporation are to manage the property and assets of the corporation on behalf of the unit owners. The unit owners elect a board of directors, which is responsible for making the decisions of the corporation.  The board’s authority ranges from making decisions on capital upgrades and financial expenditures to the creation or amendment of the rules that the unit owners must follow.

As a unit owner, you own your particular unit, and have an interest in the property’s common elements. Therefore, you share an interest in the assets and liabilities of the corporation. Before buying a condo, it is important to make yourself aware of the financial standing of the condo corporation and whether or not any legal action is pending against the corporation. You can find this information on your condominium’s status certificate. In addition to providing you with information on whether there are any outstanding common expense fees owing on a particular unit, a status certificate will provide information on the corporation’s reserve fund, whether the corporation expects any upcoming special assessments or increases in common expenses, whether there are any outstanding judgments against the corporation and provides a copy of the current rules and bylaws of the corporation that all unit owners must comply with.

A condo corporation must provide a status certificate within 10 days of one being ordered. If it fails to provide the certificate then it is deemed that there is no default in common expenses by the current unit owner, that there is no planned increase in common expenses and that there are no planned special assessments. The corporation can charge a prescribed fee of $100 for ordering a status certificate. As a general rule, you should never make a firm offer on a condominium without you or your lawyer first reviewing the condo’s status certificate. A typical agreement for the purchase of a condo contains a provision that the offer is conditional upon the review of the status certificate by the buyer’s lawyer.

If you have any questions about status certificates and why you need one when buying a condo, please contact Robert Adourian at 416-446-3303 or Robert.adourian@devrylaw.ca

“This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”