The status certificate: read this before you buy a condo townhouse

What it is

A status certificate is a package of documents issued by the condominium corporation under Ontario's Condominium Act. It is a snapshot of the complex and of the specific home you are buying. It applies to every condo townhouse, and to a freehold townhouse on a private road, where it covers the corporation that owns the shared road. A freehold townhouse with no monthly fee does not have one.

What is in it

• The home's monthly common expenses, and whether the current owner is behind on them
• The corporation's budget and most recent financial statements
• The reserve fund balance and a summary of the latest reserve fund study
• Any special assessments, and any increase in fees since the budget was set
• Lawsuits involving the corporation
• The corporation's insurance
• The declaration, by-laws and rules, which cover things like pets, rentals, parking, fences and exterior changes

How you get one

Anyone can request a status certificate from the condo corporation or its property manager. The corporation can charge up to $100, tax included, and must provide it within 10 days of the request. Sellers often order it before listing so it is ready to hand over.

Why a lawyer should read it

Most offers on resale condo townhouses are conditional on the buyer's lawyer reviewing the status certificate. A lawyer who works with condominiums knows what a thin reserve fund, a pending lawsuit or a restrictive rule means for you, and will tell you plainly whether to go ahead.

Red flags

• A reserve fund that is low compared with the repairs the study says are coming, such as roofs, windows or roads
• A special assessment that has been approved or is being discussed
• Litigation that is not covered by insurance
• Rules that conflict with how you plan to use the home