How much can condo fees go up in Ontario?
There is no ceiling in the legislation, and the board does not need the owners' approval to raise the fee. What there is instead is a paper trail that tells you an increase is coming, if you know which document to open.
The short answer
Ontario sets no cap on how much condo fees can increase. The board sets them each year through the budget, and the reserve fund study is what usually drives a large jump. Owners are told twice a year through the Periodic Information Certificate. Robin Patel, a REALTOR® in the GTA, reads those documents with buyers before an offer goes firm.
Written forBuyers comparing condominiums in the Greater Toronto Area, and owners who have just been told their monthly fee is changing and want to know whether that is allowed.
The short version
- No Ontario legislation caps a condo fee increase. A board can raise the common expense fee by whatever the approved budget requires.
- Owners do not vote on the budget. The board approves it, and the fee follows from it.
- A large jump is almost always the reserve fund catching up with a study that says the building needs more set aside than it has been setting aside.
- The Periodic Information Certificate is the document that tells owners where things stand, and it arrives twice a year whether or not anything has changed.
- A special assessment is not a fee increase. It is a separate one-time levy, and it can arrive in a year when the monthly fee has not moved at all.
There is no cap, and that is the part people do not expect
Rent in Ontario has a guideline. Condo fees do not. No provincial legislation limits how far a common expense fee can rise from one budget year to the next, and there is no percentage an owner can point to and say the increase was not permitted.
The fee is not really a price at all. It is each unit's share of what the corporation has budgeted to spend, divided in the proportions the declaration sets out. If the budget goes up, the fee goes up with it, and the only real constraint is that the budget has to be what the corporation genuinely needs.
Owners do not approve that budget. The board does. Owners elect the board and can attend the meeting where the budget is discussed, but there is no vote in which the fee itself is accepted or refused.
The fee is not really a price at all. It is each unit's share of what the corporation has budgeted to spend
What actually drives a large increase
Ordinary inflation moves a fee gently: insurance, utilities, the management contract, the cost of the cleaning and landscaping the building already buys. Those produce the small annual increases most owners barely notice.
The large jumps come from the reserve fund. A condominium has to hold money against the major repairs and replacements its own buildings and systems will eventually need — the roof, the garage membrane, the elevators, the windows — and a study commissioned by the corporation projects what those will cost and when.
If that study finds the fund is behind where it should be, the board has to close the gap, and the fee is the instrument it closes it with. That is why a building can run for years on modest increases and then move sharply in a single year: the study, not the board, is what changed.
the study, not the board, is what changed
How an owner finds out: the Periodic Information Certificate
Ontario condominium corporations have to send owners a Periodic Information Certificate twice in each fiscal year. It is not a notice that something has gone wrong — it arrives on a schedule whether or not anything has changed, which is precisely what makes it useful to read.
It sets out the corporation's financial position in summary: the budget for the year, whether the corporation is running to it, what the reserve fund holds, and whether any special assessment has been levied or is planned. It also lists the directors and any legal proceedings the corporation is involved in.
Read two consecutive certificates side by side and the direction of travel is usually obvious before any increase is announced. Owners who are surprised by a fee increase are, almost always, owners who did not open the last one.
There is a second document that fills the gaps between them. Where certain things change part-way through the year — a new special assessment among them — the corporation has to issue an update rather than wait for the next scheduled certificate.
Owners who are surprised by a fee increase are, almost always, owners who did not open the last one.
A special assessment is a different thing entirely
A special assessment is not an increase in the monthly fee. It is a separate amount levied on the units to cover something the reserve fund cannot, and it can land in a year when the fee has not moved at all.
For a buyer this distinction matters more than it first appears, because the two problems look identical from outside the building and behave completely differently. A fee increase is permanent and affects what a lender considers the carrying cost. An assessment is one-off, can be large, and is due whether or not the owner has the money.
It is also the reason a building can advertise a stable fee and still be an expensive place to own.
the two problems look identical from outside the building and behave completely differently
What to establish before an offer goes firm
A buyer gets one proper look at all of this, and it is during the condition period. The questions below are the ones that separate a building whose fee is predictable from one whose fee is not.
- When was the most recent reserve fund study, and does the current budget follow its funding plan?
- What has happened to the fee over the last three budget years, not just this one?
- Has any special assessment been levied recently, and is one contemplated?
- What does the fee actually include — and in particular, which utilities sit inside it and which are billed separately?
- Is the corporation involved in legal proceedings, and what would an adverse outcome cost it?
Written by
Robin PatelSalesperson · The Agency Toronto
Updated
Published
Read in your language
A machine translation, not Robin’s words. For anything that decides money, ask him in Gujarati or Hindi directly.
