The Status Certificate Won't Catch This

This week I posted a video walking through 3 clauses I recommend in every condo offer. One of them — the compliance representation and warranty — doesn't get enough attention. Here's why it matters.

Picture this. A buyer purchases a condo unit. It's been beautifully renovated, open-concept kitchen, updated bathrooms, the works. They close. A few months later, they get a letter from the condo corporation. The previous owner made some of these changes without ever getting board approval. The corporation is now requiring it to be restored. The cost falls on the current owner... your client.

Under most condo declarations and by-laws, unit owners cannot make improvements, additions, alterations, or repairs without the consent of the condo.

Not every alteration triggers this. But many do. And when an owner makes unauthorized changes, those changes don't disappear when they sell. They follow the unit.

Here's what makes this tricky: the status certificate won't protect your buyer here. Most status certificates include language that reads something like this:

The unit is not subject to any agreement under clause 98(1)(b) of the Condominium Act, 1998 or section 24.6 of Ontario Regulation 48/01 relating to additions, alterations or improvements made to the common elements by the unit owner, however, no unit inspection has been performed and any subsequent owner shall be responsible for addressing any violations relating to the unit which may subsequently be discovered.

Read that carefully.

The corporation is telling you upfront: we haven't inspected the unit, and whatever we find later is the new owner's problem.

A clean status certificate does not cover what happened inside the unit.

This is exactly why the compliance representation and warranty belongs in every condo offer.

The clause has the seller represent and warrant that the declaration, by-laws, and rules have been complied with — and that no improvements, additions, alterations, or repairs were made requiring the consent of the condo unless that consent was properly obtained.

What this does is shift the legal risk back to the seller where it belongs. If they made an unauthorized alteration and didn't disclose it, and it surfaces after closing, your client has a contractual representation to rely on.

Without it, they're buying whatever the previous owner left behind, with no recourse.

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