Condo Building Energy Costs in Ontario and Your Monthly Fees

You open your condo fee notice and see an increase. You wonder whether rising heating, cooling or hydro costs are behind it, and whether you are paying for energy that your neighbours use.

There is no single answer for every Ontario building. How energy is charged depends on how the building is set up and what its governing documents say. This article explains the general picture and where to look for your own answer.

How energy costs can reach your monthly fee

Common expense fees pay for maintaining the common elements, reserve fund contributions, and services such as cleaning, building maintenance and condo management. Energy used to run shared parts of a building, such as hallways, lobbies and shared mechanical systems, is the kind of cost a corporation often covers through its budget.

Your share of the budget is a percentage set in the declaration, and it may vary with unit size. For example, a unit with a 5% share of a $1,000 monthly budget pays $50 a month.

Utilities are commonly part of common expenses, but whether yours are included depends on the corporation's budget and declaration. Buildings where units are separately metered often handle this differently from buildings with shared systems.

Individually metered or shared: what to find out

Some suites have their own meters and the owner pays the utility provider directly. In other buildings, some or all energy is paid by the corporation and recovered through fees. Many buildings use a mix, for example separate hydro for each suite but shared heating or cooling.

• Is electricity metered to your suite, and who is the account holder?
• Are heating and cooling supplied by a central system paid for by the corporation?
• Is water or hot water metered by suite, or shared?
• Does the declaration describe how energy costs are divided among owners?

Why fees can rise when energy prices rise

If the corporation pays for energy through the budget, higher energy prices mean higher costs to cover. A board that fails to plan for increases can find itself short during the year.

Fees also fund the reserve fund. The board decides how much goes to the fund and may need to raise contributions to keep it adequate. That means a fee increase is not always about energy. It can reflect repairs, services and long-term planning as well.

If an unforeseen expense or a major repair goes over budget, the board can levy a special assessment through common expense fees without owner approval. Your share uses the same percentage as your common expense share, and owners must pay it. An unpaid special assessment gives the corporation a lien against the unit, covering the unpaid amount, interest, and reasonable legal costs and expenses.

Where to find your building's answer

Ontario condos are governed in this order: the Condo Act, then the declaration, then the by-laws, then the rules, and if they conflict the Act takes priority. The declaration is usually the best place to see how common expenses are shared.

If you are buying, a status certificate must be provided within 10 days. It may include a statement on the most recent reserve fund study and the state of the fund, and special assessments levied since the current budget and why. Whatever it includes or leaves out binds the corporation.

What to do next

• Read the declaration and by-laws sections on common expenses and utilities.
• Review the current budget and ask the board or management how energy is budgeted.
• Check whether your suite has its own meters and who holds each utility account.
• Compare this year's budget to last year's to see where the increase comes from.
• Speak with a lawyer if the documents are unclear or you think costs are being charged wrongly.

Frequently asked questions