How Much Can Condo Fees Increase in Ontario in One Year?

A letter arrives saying your condo fee is going up by far more than you expected. Your first question is probably whether the corporation is allowed to do that, and whether there is a limit on how much fees can rise in one year.

The honest answer starts with how fees are set. Below we explain how the budget turns into your monthly amount, what disclosure rules protect buyers, what a special assessment is, and where owners can and cannot take a dispute.

How your fee is worked out

Condo fees, also called common expenses or maintenance fees, cover maintaining the common elements, reserve fund contributions, and services such as cleaning and building maintenance. They are a financial obligation shared among all owners.

The corporation creates a budget for every fiscal year. The declaration sets each unit's proportion of the common expenses, which is a percentage that may vary with unit size, and your share is generally the annual budget multiplied by that percentage. For example, a $1,000 monthly budget and a 5% share means $50 a month.

That means a fee increase is usually the result of a larger budget. Higher costs for maintenance, services or reserve fund contributions all feed into it. Your percentage stays the same unless the declaration is changed.

Is there a legal cap on the yearly increase?

This article does not state that a cap exists, and it does not state that one does not exist. Whether any limit applies to your situation depends on the condominium legislation, your corporation's declaration and the facts, and a lawyer can confirm it for you.

What the guidance does make clear is that the budget is something owners are expected to review. Owners are expected to review the budget and financial statements, which the board must approve before the annual general meeting.

• Ask for the full budget, not just the new fee amount.
• Compare the line items with last year's budget to see what actually changed.
• Look at the reserve fund contribution line, since reserve contributions are part of what fees cover.
• Check your declaration for how expenses are allocated to your unit.

Special assessments are a separate way costs reach you

If the budget has a large shortfall, the corporation can charge an extra one-time special assessment on each unit, using the same percentage as common expenses. The board can do this through common expense fees without owner permission.

So a sudden jump on your statement may be a regular fee increase, a special assessment, or both. Read the notice closely to see which it is and what reason is given.

Changing the percentages themselves is much harder. Changing the proportions of common expenses allocated to each unit needs the consent of 90% of owners, and most other declaration amendments need 80%. An amendment is not effective until the amended declaration is registered at the Land Registry Office.

Disclosure: what buyers are told and why it matters

When you buy a resale unit, the status certificate is the main disclosure document. It can show the unit's common expenses and whether it is in arrears, any increase in common expenses with the reason, and any special assessments charged to the unit since the current budget, with reasons. The annual budget must be included in any status certificate.

Disclosure has consequences. The Condominium Authority of Ontario notes that a corporation may be unable to collect a common-expense increase or special assessment that was not properly disclosed in the status certificate, and it cites a Superior Court case where an owner was exempt from a special assessment not clearly noted in the certificate. Potential increases should be disclosed promptly and in clear language.

If you are still buying, the Condominium Authority of Ontario advises having a lawyer review the status certificate and checking its Condo Registry before you buy.

Where can an owner dispute an increase?

This is where many owners are surprised. The Condominium Authority Tribunal cannot hear financial or budget disputes, repair and maintenance disputes, or changes to the common elements. A complaint that a budget or fee is too high is therefore not something you can usually take there.

Other routes may exist, such as raising it at the owners' meeting, asking the board for an explanation, or getting legal advice about court options. Which one makes sense depends on your declaration and the facts.

Do not simply stop paying. Unpaid fees can lead to a lien on the unit, which covers the unpaid amount, interest and reasonable legal costs. The corporation must give written notice of lien at least 10 days before registering a Certificate of Lien, and must register it within three months of the default or the lien expires. If you cannot pay, contact the corporation promptly, as a payment plan may be possible.

What to do next

• Get the full budget and any notice explaining the increase.
• Work out whether the change is a fee increase, a special assessment, or both.
• Calculate your share using your unit's percentage from the declaration.
• If you are buying, order the status certificate and have a lawyer review it.
• If you are already an owner and a dispute is brewing, speak with a lawyer before withholding any payment, because liens can follow arrears.
• Raise questions at the owners' meeting and in writing so there is a record.

Frequently asked questions