Special Assessments in Ontario Condos: When and How Much

A special assessment notice can be a shock, especially when it asks for a large amount on short notice. It helps to understand why the board can do this and what the rules say about how much you owe.

This article explains the general rules in Ontario, how collection works, and where there may be room to question the charge. Your own declaration and by-laws matter, so a lawyer can review them if the amount is significant.

What a special assessment is

A special assessment is an ownership cost that is separate from your regular monthly fees. It is not the same as a chargeback, which is a cost the corporation bills to one owner, usually because of that owner's act or omission.

Your regular common expense fees pay for maintaining the common elements, reserve fund contributions, and services such as cleaning, building maintenance and condo management. The board decides how much goes to the reserve fund and may need to raise contributions to keep it adequate.

Boards generally use special assessments when the regular budget and the reserve fund are not enough for a particular need.

Why a board can levy one

A condo board can levy a special assessment through common expense fees without owner approval. Reasons include:

• Unforeseen expenses.
• A major repair that exceeds its budget.
• Litigation costs.

Reserve funds may be used only for major repair and replacement of the common elements and assets of the corporation. If a cost falls outside that, or the fund falls short, an assessment is one way the corporation may raise money.

How much you pay

Your share of a special assessment uses the same percentage as your common expense share, and owners must pay it. That percentage is set in the declaration and may vary with unit size.

For example, a unit with a 5% share of a $1,000 monthly budget pays $50 a month. Your share of a special assessment is worked out the same way, using your percentage of the total amount levied.

Collection, liens and possible challenges

An unpaid special assessment gives the corporation a lien against the unit. The lien covers the unpaid amount, interest, and reasonable legal costs and expenses.

If a lien is not registered, it expires three months after the default, and the corporation then loses its priority over other parties with an interest in the unit. Before registering, the corporation gives a Notice of Lien, and if the arrears are not paid within 10 days it can register a Certificate of Lien. You can pay everything secured by the lien at any point until the unit is sold, and the corporation must then discharge it.

Starting 15 days after the Certificate of Lien is registered, the corporation can issue a Notice of Sale Under Lien, which sets a redemption date 45 days after it is issued. If the owner does not pay by that date, the corporation can sue for possession in the Ontario Superior Court of Justice.

If you want to dispute a lien, the forum depends on the issue. A lien tied to a matter within the Condominium Authority Tribunal's jurisdiction, such as nuisance, parking, storage, pets, records or settlement compliance, can be disputed at the Tribunal, while liens tied to issues outside that jurisdiction, such as repairs, must go to the Superior Court of Justice.

There is one notable exception for buyers. In a court decision the Condominium Authority of Ontario describes, a buyer was exempt from their share of a special assessment because the status certificate had not clearly disclosed that assessments might be levied. A status certificate binds the corporation as to whatever it includes or leaves out. Whether that applies to you depends on your facts.

What to do next

• Read the notice for the total amount, your share and the stated reason.
• Compare your share to the percentage in your declaration.
• Check your status certificate if you bought recently, including any statement on special assessments levied.
• Check whether the certificate included a statement on the most recent reserve fund study and the state of the fund.
• Ask about payment arrangements before you fall behind, since arrears can lead to a lien.
• Get legal advice if the amount is large, you think the reason is wrong, or a lien notice arrives.

Frequently asked questions