What Condo Maintenance Fees Are
Condo maintenance fees are common expenses. That is the language in the Condominium Act, 1998. Every owner pays a share of what it costs to run the corporation: the building, the staff, the insurance, and the reserve fund.
The listing will say "maintenance fees." The declaration will say "common expenses." Same obligation. It is a monthly charge, set from an annual budget, in the proportion the declaration assigns to your unit. It is not optional, and it is not the same as legal fees or the mortgage.
A low number is not a bargain if the reserve is thin. The place to see the real picture is the status certificate, not the listing.
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What They Cover
The operating side keeps the building running. Management, cleaning, snow, landscaping, elevators, hallways, the garage, amenities, staff, and the corporation's insurance. The Condo Authority of Ontario puts it the same way: common elements, services, and the reserve.
Utilities are not standard. Water and waste are often in the fee. Hydro and gas are often extra, billed like a freehold. Cable or internet only if the corporation has a bulk contract. Ask what is in, then add what is not, or the monthly cost is a lie.
A slice of every payment goes into the reserve fund. That is the account for major repair and replacement of common elements: roof, windows, garage membrane, elevators. Section 93 of the Act requires the fund. Section 94 requires a reserve fund study at least every three years. The reserve is not a rainy-day operating account. Routine repairs come from the operating budget.
How the Amount Is Set
The board passes an annual budget. Your unit pays the percentage in the declaration, usually tied to size and allocated parking or locker. A two-bedroom with two spots pays more than a bachelor in the same building because the declaration says so, not because the board picked on you.
Exclusive-use balconies, parking, and lockers still sit inside the common-element and repair framework the budget funds. For the ownership and alteration side, see condo exclusive-use areas.
There is no statutory cap on how much fees can rise. If insurance, utilities, staffing, or the reserve contribution go up, the budget goes up. Owners get the budget. They do not vote the number down unless the declaration says they do.
Older buildings, pools, concierges, and thin reserves push the number up. Newer buildings can look cheap in year one because the developer set the first budget. That number often moves after turnover, once actual costs replace the estimate. On a pre-construction condo, treat the first-year fee as a forecast.
Special Assessments and Chargebacks
A special assessment is a one-time extra common expense. The board levies it when the operating budget and the reserve cannot cover a shortfall: an emergency repair, a project that came in high, a lawsuit, a large insurance deductible. Your share is the same declaration percentage as the monthly fee. The Act does not require an owner vote unless the declaration or by-laws say so.
You still have to pay if you just closed, or if you disagree with the project. Section 84 is the duty. The off-ramp, if there is one, is what the status certificate disclosed before you waived the condition. The certificate binds the corporation as against a purchaser who relies on it. A known assessment left off the certificate is the fight. Skipping the review is how people close into one.
A chargeback is different. It is a cost the corporation adds to one unit because of that owner's act or omission, so the rest of the building does not pay it. A leak from your unit. A rule you ignored. It still sits as common expenses against the unit.
Unpaid Fees Follow the Unit
Unpaid common expenses are a lien on the unit under section 85. The corporation has three months from default to register a certificate of lien or the lien expires. Once registered, it covers the arrears, interest, and reasonable legal costs, and it can be enforced like a mortgage. It usually ranks ahead of the mortgage.
On a purchase, arrears do not stay with the seller just because they were the ones who missed the payment. They attach to the unit. The status certificate is supposed to say what is owing. That is why a real estate lawyer in Toronto reads it before closing, not after.
What the Number Is Not
During interim occupancy on a new condo, occupancy fees are not common expenses. They are the builder's occupancy charge: estimated taxes, interest on the unpaid balance, and estimated common expenses. They do not build equity. The real common expense starts when the corporation is registered and you take title.
A neighbourhood average does not tell you if this building can pay for the garage. The status certificate, the budget, and the reserve fund study do. Fees that look high can mean the reserve is actually funded. Fees that look low can mean the next board will have to raise them, or levy a special assessment.
On a resale condo, common expenses are the monthly cost of the building you are buying into. The lawyer reads the certificate so you know the fee, what it covers, and whether a special assessment is already in the paper. All-inclusive legal fees on a residential purchase start at $2,299 plus HST. The corporation's $100 status-certificate fee is a separate line.
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Zachary Soccio-Marandola
Real Estate Lawyer
Direct: (647) 797-6881
Email: zachary@socciomarandola.com
Frequently Asked Questions (FAQ)
Do condo maintenance fees include utilities?
Not always. Water and waste are often in the fee. Hydro and gas are often extra. Cable or internet only if the corporation has a bulk contract. The status certificate and the budget show what is actually included.
Are condo fees monthly or yearly?
Monthly. The corporation sets an annual budget, then collects each owner's share in twelve instalments. Special assessments are extra, and they are not the monthly fee.
Are condo fees tax-deductible?
Not if you live in the unit. If you rent it out, the CRA generally lets you deduct common expenses as a rental expense. A special assessment can be current or capital, depending on what it paid for. That is a tax question, not a closing question.
Is there a cap on how much the board can raise fees?
No statutory cap in Ontario. The board sets the budget to cover operating costs and the reserve contribution. A large jump is often a thin reserve or a year of under-budgeting showing up, not a surprise the Act forbids.
If the seller is behind on condo fees, do I pay them?
They attach to the unit. Unpaid common expenses are a lien under section 85. The status certificate should disclose what is owing. That is why the review happens before you waive the condition, not on closing day.