Special Assessments in Ontario Condos: When and How They Apply

A notice arrives saying your condo corporation is levying a special assessment. It is separate from your monthly fees, it may be large, and it can feel sudden. Knowing why boards use them helps you decide what to ask next.

This article explains the general rules in Ontario: what a special assessment is, the reasons behind one, how your share is calculated, and what to check about timing and payment. Details such as notice periods and instalments depend on the board's decision and your governing documents.

What a special assessment is

Special assessments and chargebacks are ownership costs separate from regular monthly fees. Regular fees pay for maintaining the common elements, reserve fund contributions, and services such as cleaning, building maintenance and condo management.

A special assessment is an extra amount charged to owners, usually to cover a cost the regular budget did not. A chargeback is different: it is a cost billed to one owner, usually because of that owner's act or omission.

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

The reserve fund is meant for major repair and replacement of the common elements and assets. Owners normally pay into it through monthly fees, and the board may need to raise contributions to keep it adequate. The specific reason given in your notice is what matters, so read it carefully and ask the board to explain it if it is unclear.

After receiving a reserve fund study, the board must review it within 120 days and propose a funding plan. Boards are urged to be cautious about departing from the study provider's professional advice.

How your share is calculated

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, if your share is 5%, you would pay 5% of the amount being assessed. Check your declaration to confirm your own percentage, and ask the board how it arrived at the total.

Notice, timing and payment

How much notice you receive, when payment is due and whether it can be spread over instalments depend on the board's resolution and your building's governing documents. 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. A lawyer can confirm what applies to your building.

If you cannot pay in one amount, contact the property manager or board in writing early and ask whether a payment arrangement is available. Get any agreement in writing.

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.

How a lien can progress if it goes unpaid

When an owner defaults on common expenses, the corporation automatically has a lien against the unit. The steps that can follow are set out below. How they apply to you depends on your situation, so it is worth confirming with a lawyer.

• The lien expires three months after the default unless the corporation registers a Certificate of Lien in the Land Registry Office. If it expires, the corporation loses its priority over other parties with an interest in the unit.
• Before registering, the corporation gives you a Notice of Lien. If the arrears are not paid within 10 days, it can register a Certificate of Lien, which covers all amounts owed under the lien, including later common expenses, interest, and the legal fees and costs of preparing it.
• Starting 15 days after the Certificate of Lien is registered, the corporation can issue a Notice of Sale Under Lien. It sets a redemption date 45 days after it is issued, and the corporation cannot take further enforcement steps during that period.
• If you do not pay by the redemption date, the corporation can sue for possession in the Ontario Superior Court of Justice. After judgment it can sell the unit, recover the lien amounts from the proceeds, and must pay the remaining balance to the former owner within 90 days of the sale.

You can pay everything secured by the lien at any point until the unit is sold, and the corporation must then discharge the lien. A lien tied to an issue within the Condominium Authority Tribunal's jurisdiction, such as nuisance, parking, storage or pets, can be disputed at the Tribunal, while liens tied to issues outside it, such as repairs, must go to the Superior Court of Justice.

What to do next

• Read the notice and note the amount, the stated reason and the due date.
• Find your percentage share in the declaration and check the maths.
• Ask the board for any supporting documents, such as quotes or the reserve fund study.
• Ask in writing about payment options before the due date.
• If you are buying or selling, review the status certificate, which may state special assessments levied since the current budget and why.
• Speak with a lawyer if the reason, process or amount seems wrong.

Frequently asked questions