How Ontario condo corporations work, what your fees pay for, owner rights, and how to avoid special assessment surprises.
Every Ontario condominium is governed by a condo corporation — a legal entity created under the Condominium Act, 1998. When you buy a condo unit, you automatically become a member of the condo corporation and share ownership of the common elements (hallways, amenities, parking, exterior). Understanding how the corporation works is essential before you buy.
A condo corporation is a non-share capital corporation created automatically when a condo is registered. It has no profit motive — its sole purpose is to manage and maintain the common elements for the benefit of all unit owners. The corporation is governed by the Condominium Act, 1998 and its own governing documents: the declaration, by-laws, and rules.
Declaration: The foundational document, registered on title, that defines the boundaries of units vs. common elements, sets the percentage of common interest for each unit (which determines your share of condo fees), and includes any restrictions on use (e.g., no pets, no short-term rentals). Changing the declaration requires a 90% vote of all owners — extremely difficult.
By-laws: Govern how the corporation is managed — board elections, quorum requirements, property manager duties. Require 51% owner vote to change.
Rules: Day-to-day operational rules — noise, move-in procedures, amenity booking, parking. The board can change rules with proper notice to owners.
The condo corporation is managed by a board of directors elected by unit owners at the Annual General Meeting (AGM). Boards are typically 3–7 volunteer unit owners. The board hires the property management company, approves budgets, oversees major repairs, and enforces the declaration and rules.
As a condo owner, you have the right to run for the board, vote at AGMs, and access board meeting minutes (upon request). Engaged owners who participate in governance protect their investment.
The Condominium Act requires every Ontario condo corporation to maintain a reserve fund for major repairs and replacements. The board must conduct a reserve fund study (by a qualified professional) at least every three years, and maintain the fund at a "adequate" level.
Warning signs of a poorly funded reserve: reserve fund below 70% of recommended level in the reserve fund study; special assessments in the past 3–5 years; deferred major repairs (roof, parking garage, windows, elevators); and rapidly increasing condo fees to "catch up" on contributions.
Before buying any resale condo, obtain and review the current reserve fund study as part of your status certificate review. A well-funded reserve means predictable fees. An underfunded reserve means you could receive a special assessment demand for $5,000–$50,000 with little notice.
When the reserve fund is insufficient for a major repair, or when an unexpected expense arises (e.g., lawsuit, emergency repair), the corporation can levy a special assessment against all unit owners. These are calculated based on your common interest percentage.
Special assessments can range from a few hundred dollars to tens of thousands per unit. They are typically due within 30 days of notice. Some mortgage lenders require disclosure of pending special assessments before closing — which is one reason your lawyer reviews the status certificate so carefully.
| Component | Typical % of Fees | What It Covers |
|---|---|---|
| Building insurance | 25–35% | Common element insurance policy |
| Property management | 15–25% | Management company fees and staff |
| Utilities (common) | 10–20% | Lobby/hallway electricity, water |
| Maintenance & repairs | 10–15% | Day-to-day repairs, cleaning |
| Reserve fund contribution | 15–25% | Major future repairs |
| Amenities | 5–10% | Gym, pool, party room costs |
Most condo corporations hire a licensed property management company to handle day-to-day operations. In Ontario, property managers must be licensed under the Condominium Management Services Act, 2015. Common management companies include FirstService Residential, Crossbridge, and Del Property Management.
Management fees are a significant portion of condo fees — typically $50–$100/unit/month. The board should review the management contract annually and ensure the manager is performing to standard. See our Property Management Fees guide.
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