Polis says the unfortunate result of this decision for the other unit owners is that, because of the faulty status certificate, “what is going to happen is every unit in the corporation other than the unit that was successful in this application will have to subsidize the costs of that exemption.”
Importance of a status certificate when buying or selling a condo
The case dates to the heated housing market of June 2021. Bruce and his agent visited the unit on the same day set for offers. He instructed his agent to obtain the status certificate – a disclosure document that condominium corporations must provide to prospective purchasers of units upon request.
That day, the agent received a status certificate from the seller’s agent dated June 8, 2021. In paragraph 12, the status certificate stated: “The Corporation has no knowledge of any circumstance that may result in an increase in the common expenses for the unit. Except: The Corporation’s fiscal year end is August 31, 2021. Therefore, monthly common element fees may be increased in accordance with the new budget, which has yet to be determined.”
The real estate agent summarized the contents of the status certificate to Bruce, concluding that the finances “looked to be in order,” that the reserve fund “seemed to be properly funded,” and that there was “nothing to suggest there might be any special assessments anytime soon.”
Relying on the status certificate, Bruce made an offer of $535,000, which was accepted, entering into a binding and irrevocable agreement without conditions. Bruce did not retain a lawyer to review the status certificate, and he did not read all the information in the status certificate, relying on the summary provided by the agent.