Thinking of Buying a Condo? Why the Status Certificate is Your Best Friend
Buying a condominium is an exciting milestone, but it comes with a unique set of legal and
financial considerations that differ from buying a freehold house. As a real estate lawyer, I
cannot stress this enough: the status certificate is one of the most important documents in your
transaction.
While this post provides a general overview, please remember that every situation is unique.
This isn’t formal legal advice, but I hope it encourages you to seek out proper counsel before
you sign on the dotted line.
The Financial Health Check
Most buyers immediately look at the financial section of a status certificate, and for good
reason. We need to investigate several key areas:
● Common Expense Arrears: We must ensure there are no outstanding fees. If there are,
we require the seller to pay them in full prior to closing.
● Special Assessments: We look for any current or imminent “extra” charges that could hit
your wallet shortly after you move in.
● The Reserve Fund: Is the fund low? Is the board following the reserve fund study? We
look for financial irregularities or costs rising faster than expected, as these will impact
your monthly fees in the years ahead.
● Insurance Issues: In rare, “crazy” cases, a building might not even have insurance. If that’s
the case, your lender likely won’t fund the deal, and I would advise you not to proceed.
Litigation and Legal Risks
It’s not just about the bank account; it’s about the legal standing of the corporation.
● Ongoing Lawsuits: Significant litigation can affect the building’s ability to secure
insurance or your ability to get a mortgage.
● Unauthorized Improvements: If a previous owner installed a patio, screened in a balcony,
or drilled a hole for an AC pipe without a proper agreement from the condo board, you
could be left responsible for the fallout.
Lifestyle Restrictions: Can You Actually Stand to Live There?
The status certificate contains the “rules of the house,” and some might be deal-breakers for
you:
● Pet Policies: Some buildings ban pets entirely, while others have strict weight limits (e.g.,
dogs under 25 lbs) or limit the number of pets you can own.
● Smoking Rules: Restrictions are becoming stricter. Some buildings ban smoking in
hallways, while others ban it inside units or even on the entire property.
● Flooring Requirements: Occasionally, a review reveals that you are required to have
carpets to dampen noise. If you prefer hardwood, an unexpected management complaint
could force you to buy rugs you didn’t budget for.
Pro Tip: We also check things like locker and parking unit numbers to ensure they
match your contract. If they don’t, we may need an amendment to ensure you’re
actually getting what you paid for.
Don’t fly blind into a condo purchase. If you are contemplating a transaction, let’s sit down
and review that status certificate together to ensure your investment—and your lifestyle—is
protected.
Disclaimer: This post does not constitute legal advice. Every transaction and personal situation is unique.
