Status certificate red flags

Look forAny amount the owner is behind on, or a certificate of lien registered against the unit.

Unpaid common expenses give the corporation a lien on the unit, and that lien can rank ahead of a mortgage (Condominium Act, 1998, s. 86).

Look forThe word “except” followed by an amount or a description.

These are costs the corporation has added to this unit's common expenses, such as the cost of repairing damage or an insurance deductible.

Look forAn agreement listed as binding the unit, whether a copy is attached, and whether it is being complied with.

It sets conditions on a change an owner made to the common elements, such as new flooring.

Look forAny note about alterations, compliance letters or breaches at this unit.

In MTCC 723 v. Reino (2018 ONCA 223), a certificate flagged an unapproved extra bedroom and a moved kitchen.

Look forWhether each space is an owned unit or an exclusive-use common element, and whether any space sits in a different corporation.

A space in a neighbouring corporation is covered by that corporation's documents, not this certificate.

Look forThe words “may result in a deficit” and the amount.

A shortfall in the operating budget has to be covered, usually by higher fees or an assessment later in the year.

Look forAny increase since the budget was set, and the reason given.

An increase after the budget was set can point to costs the budget did not plan for.

Look forEach assessment levied since the budget, this unit's share, and whether it is paid.

A special assessment means the corporation needed more money than its budget or reserve fund provided.

Look forEverything after “except”. Then check the auditor's notes, the budget and the funding notice for repairs, loans or assessments that paragraph 12 leaves out.

This is where the corporation discloses anything it knows of that may increase common expenses. In Bruce v. WNCC 26 (2023 ONSC 2995), a court looked at what the certificate left out.

Look forA negative operating fund, long-term debt, and how much owners owe in unpaid fees.

An operating deficit has to be made up, loan payments are part of the fees until repaid, and one accountant's rule of thumb treats unpaid fees above 5 to 10% of the budget as a collection problem.

Look forThe balance and its date, compared with the balance the plan projects for this fiscal year.

Some Ontario real estate lawyers treat a balance under half the planned level as a warning sign. That is a rule of thumb, not law, and a mid-year balance is naturally below the year-end figure.

Look forThe study's date and the date the next one is due.

An updated study is required at least every three years (O. Reg. 48/01, s. 31). An old study can understate what repairs will cost.

Look forWhether the plan “has been implemented”, and any contributions below the plan's table.

Paying in less than the plan calls for leaves less for future repairs.

Look forBig projects in the next few years and their estimated cost.

When planned spending is larger than the fund, the difference comes from contributions, a loan or an assessment.

Look forPlans to increase the reserve fund outside the existing plan.

More money for the reserve fund usually comes from higher fees or an assessment.

Look forWhether the corporation is the one being sued, the amount, and whether its insurer is defending.

If a claim is not fully covered by insurance, the corporation pays the rest, and owners fund the corporation through their fees.

Look forAny judgment against the corporation that is still unpaid.

An unpaid judgment is a debt of the corporation.

Look forAny court order appointing one.

A court appoints an inspector or administrator when a corporation's records or management are in serious difficulty.

Look forAny outstanding warranty claim.

These usually concern construction defects in a newer building.

Look forAny pending application to amend the declaration.

An amended declaration can change how the building is shared, used or paid for.

Look forThe statement that all required insurance has been secured, without changes.

Paragraph 26 normally confirms that all insurance the Act requires is in place.

Look forA policy that ended before the certificate's date, or renews soon.

The attached certificate should show insurance in force on the certificate's date. Premiums and deductibles can change at renewal.

Look forEvery deductible, especially for water damage.

When damage starts in a unit, the owner can be charged the lesser of the deductible and the repair cost (Condominium Act, 1998, s. 105).

Look forA by-law that makes owners responsible for the deductible in more cases.

A by-law can widen what the Act already allows. Worth comparing with your own unit insurance.

Look forWhether one is in the package.

It decides which finishes the corporation insures and which you insure yourself.

Look forHow many days old the certificate is.

A certificate speaks as of its date. Many lawyers and lenders look for one dated within the last 30 days.

Look forFields left empty, either/or choices left unstruck, and details that do not agree with the attachments.

Under the Condominium Act, 1998 (s. 76(4)), information the corporation leaves out is treated as a statement that there is none.

Look forThe declaration, all by-laws, the rules, the budget, the audited statements, the funding notice, the insurance certificate and the list of agreements.

The certificate must come with these, and the fee of up to $100 covers all of them (O. Reg. 48/01, s. 18).

Look forAgreements to share facilities or costs with another corporation.

Anyone who orders the certificate can ask to examine the listed agreements (Condominium Act, 1998, s. 76(7)).

Look forHow many units were leased last year, against the total.

It counts only leases owners reported. No law sets a limit; some buyers and lenders look at a high share of rentals.