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February 28, 2014 Jonathan H. Fine

Status Certificates

Status certificates are dealt with in s. 76 of the Condominium Act, 1998 which is a consumer protection statute.  The purpose of a status certificate (for a purchaser) is so that the purchaser can make an informed purchase decision.  The reason that this is important to a purchaser is that condominium unit owners are personally liable for the debts and liabilities of a condominium corporation.  Therefore, the purchaser wants to ensure that he/she is not purchasing an existing or known liability.  The effect of giving a status certificate is that the status certificate is binding on the condominium corporation with respect to the information it contains or is deemed to contain as of the date it is given. 

One risk that a condominium purchaser assumes on closing, is that a liability will arise as early as the day after he/she closes the transaction of purchase and sale.  Such risk does not apply to known liabilities that were not disclosed in the status certificate.  The status certificate protects  the purchaser from such liabilities.

The mandatory form of status certificate is prescribed by the regulations pursuant to the Condominium Act, 1998.  Paragraph 12 of the standard form status certificate provides as follows:

12. The Corporation has no knowledge of any circumstances that may result in an increase in the common expenses for the unit [if applicable add: except …………………………………………... (give particulars of any potential increase, including any assessment levied by the board against the unit, and the reason for it)].… [Emphasis Added]

It is important to note that the focus of paragraph 12 is not whether the common expenses will increase, but rather on whether there are “circumstances” known to the condominium corporation which might possibly cause the common expenses to increase.

For this reason, it is critical that before a status certificate is signed and delivered, proper thought is given to the contents of the status certificate as a whole, but especially to paragraph 12.

Jonathan H. Fine

Jonathan H. Fine Partner

B.Sc., J.D., F.C.C.I.
905.760.1800 x226

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