Special Assessments on Ontario Condos: Who Pays When You're the New Buyer?

You've found a resale condo you love. The unit looks great. The monthly fees are reasonable. Then, six months after closing, a letter arrives from the condo corporation: every unit owner must contribute thousands of dollars toward emergency rooftop repairs. You had no idea. Who is responsible for a condo special assessment in Ontario when you're the new owner?

The answer depends entirely on timing, what the status certificate disclosed, and how your Agreement of Purchase and Sale was drafted. This article explains each scenario.

What Is a Special Assessment?

A special assessment is a one-time charge that a condo corporation levies against all unit owners when it cannot cover a significant capital expense through its reserve fund or operating budget. Common triggers include:

• Emergency structural repairs discovered unexpectedly
• A reserve fund that has been underfunded for years
• A major project (parking garage, windows, mechanical systems) whose cost exceeded projections
• An insurance deductible after a significant claim

The assessment is typically calculated based on each unit's proportionate share of common expenses. Depending on the size of the project and the number of units, assessments can range from a few hundred to many tens of thousands of dollars per unit.

The Status Certificate: The Disclosure Document That Matters

Ontario's Condominium Act requires the status certificate to disclose whether a special assessment has been levied or whether one is "contemplated" as of the date the certificate is issued.

This is the key legal disclosure. A buyer who purchases a condo after reviewing a status certificate that discloses a special assessment — whether already approved or merely contemplated — generally takes on that liability.

"Levied" means the board has formally approved the assessment and owners have been notified.

"Contemplated" means the board has discussed or disclosed a likely assessment, even if no formal approval has occurred. This lower threshold exists specifically to protect buyers from sellers who might time a purchase to close just before a formal vote.

Three Scenarios — and Who Pays

Scenario 1: Assessment Disclosed in the Status Certificate

If the status certificate you receive discloses a special assessment (levied or contemplated), and you proceed to close, you are taking on that obligation. Your lawyer should flag this in the review, quantify the exposure if possible, and give you the opportunity to:

• Renegotiate the purchase price to reflect the liability.
• Require the seller to pay the assessment as a condition of closing.
• Terminate the agreement if the certificate condition has not been waived.

The status certificate condition exists precisely for this scenario. Use it.

Scenario 2: Assessment Approved After the Certificate Date but Before Closing

This is a greyer area and one of the more common disputes in condo purchases. If the board approves a special assessment after the certificate is issued but before you close, the question is whether your Agreement of Purchase and Sale adequately protects you.

A well-drafted agreement typically includes a representation that the seller is not aware of any pending special assessments not disclosed in the certificate. If a new assessment is approved, that may constitute a breach of the seller's representation, giving you remedies.

This is why your lawyer drafts and reviews the agreement — not just the certificate.

Scenario 3: Assessment Approved After Closing

Once you've closed and become the registered owner, you are responsible for all future special assessments like any other owner. The seller's obligation ends at closing (absent fraud or misrepresentation).

If the reserve fund study clearly showed the building was in trouble and a rational buyer would have foreseen an assessment, the courts have generally not been sympathetic to buyers who failed to do adequate due diligence.

The Risk of Waiving the Status Certificate Condition

In competitive markets, buyers sometimes waive the status certificate condition to make their offer more attractive. This eliminates your ability to walk away or renegotiate if the certificate reveals a problem — including a pending special assessment.

Waiving blind is a decision only you can make. But you should make it knowing the financial exposure: a condo with a serious reserve fund deficit or a contemplated large-scale repair could mean a special assessment that rivals or exceeds the savings from winning the bidding war.

Practical Steps to Protect Yourself

1. Always make your offer conditional on status certificate review — and give yourself the full 10-day window.
2. Have your lawyer review the reserve fund study, not just the first page of the certificate.
3. Ask specifically about contemplated assessments — the certificate may reference board minutes or engineer reports that signal trouble.
4. Negotiate seller representations in the agreement regarding known future assessments.
5. Factor reserve fund health into your offer price — an underfunded building is a less valuable building.

Frequently asked questions