What is a special assessment on a condo in Ontario and how does it affect closing?

A special assessment is an additional charge levied on condo unit owners by the condominium corporation when the reserve fund has insufficient funds to cover a necessary capital repair or other expense. Unlike monthly maintenance fees, a special assessment is a one-time or short-term charge that can be significant in amount.

When buying a resale condo in Ontario, your lawyer reviews the status certificate to check whether any special assessment has been approved or is reasonably anticipated. If a special assessment has already been declared — meaning the corporation has voted to levy it — but not yet fully collected, there may be an outstanding balance against the unit at the time of closing.

An outstanding special assessment lien against the unit must typically be resolved at closing. Either the seller pays it off, or the buyer accepts a credit representing the amount owing and takes responsibility for paying the balance to the corporation. This is an important issue to catch in the status certificate review: if a special assessment is looming but not yet declared, the buyer inherits the obligation once they become an owner. Your lawyer can identify these red flags and advise on how to address them in the offer or on closing.