Condominiums in Ontario

Buying a condominium in Ontario is not the same as buying a freehold home. The buyer is purchasing a unit plus an undivided share in the common elements and a membership in a corporation that owns and manages those common elements. That corporation's financial health, rules, and governance directly affect the buyer, which is why condo due diligence centres on one document: the status certificate.

The Status Certificate

The status certificate is the corporation's official snapshot of a unit and the corporation's finances and legal standing. It is the single most important due-diligence document in a resale condo purchase.

What it contains

Under the Condominium Act, 1998 and its regulations, the status certificate (and its attachments) must disclose, among other things:

• Common expenses (condo fees) for the unit, and whether the unit is in arrears of common expense payments.
• Any increase in common expenses the board has declared since the current budget, and any assets or liabilities not reflected in the budget.
• Any special assessment the board has levied or voted to levy since the current year's budget, with the reasons.
• A statement of the corporation's reserve fund, including the amount in the fund and a reference to the most recent reserve fund study.
• Whether the corporation has knowledge of any circumstance that may result in an increase in common expenses for the unit.
• Any legal actions (judgments, ongoing litigation) to which the corporation is a party.
• Copies of the corporation's current declaration, by-laws, and rules.
• The corporation's current budget, most recent audited financial statements and auditor's report, and certificate of insurance.
• Names and addresses for service of the directors and officers.

Maximum fee and timeline

• The corporation may charge a fee to produce a status certificate. That fee is capped by regulation at $100, inclusive of all applicable taxes (HST). Verify the current cap at condoauthorityontario.ca and ontario.ca/e-Laws — the cap is set by regulation and can be amended.
• Once the corporation receives a written request and the fee, it must provide the status certificate within 10 days. If it fails to do so, it is deemed to have given a certificate saying there are no arrears, no special assessments, and the by-laws/rules are as attached.
• Corporations often offer an expedited (rush) service for an additional, unregulated charge; the $100 cap applies to the standard 10-day certificate, not to optional rush delivery.

Using a status-certificate review condition in the APS

In a resale condo purchase, buyers commonly make the offer conditional on their lawyer's review of the status certificate. A typical condition provides that:

• The offer is conditional on the buyer's lawyer reviewing the status certificate and its attachments and finding them satisfactory, in the lawyer's sole and absolute discretion;
• The seller agrees to request and obtain the status certificate (usually within a set number of banking days after acceptance); and
• The buyer has a fixed period after receiving the certificate (for example, until a set time a few business days later) to notify the seller if the condition is not satisfied, failing which the offer becomes firm.

Because the certificate can run to dozens or hundreds of pages of financial statements, budgets, declaration, by-laws, rules, and insurance, review by a real estate lawyer is standard. The lawyer looks for red flags such as inadequate reserve funds, looming special assessments, litigation, unusual rules (e.g., pet, rental, or short-term-rental restrictions), and arrears attached to the unit. Exact clause wording should come from current OREA forms/clauses or the lawyer.

Reserve Fund and Reserve Fund Studies

The reserve fund is a dedicated savings account the corporation must maintain to pay for major repair and replacement of the common elements and assets (roofs, elevators, boilers, parking structures, windows, etc.) — not for day-to-day operating costs.

• The adequacy of the reserve fund is informed by a reserve fund study, a technical/engineering analysis projecting future repair and replacement costs and the contributions needed to fund them.
• Under the Condominium Act, a corporation must conduct its first (comprehensive) reserve fund study within a set period after the declaration and description are registered, and then update the study at least every three years, alternating between updates with a site visit and updates based on a records review (without a site visit).
• A chronically underfunded reserve fund is a warning sign: it often signals future fee increases or special assessments. Buyers and their lawyers should compare the current reserve balance against the study's recommended balance.

Verify current study intervals and requirements at ontario.ca/e-Laws and condoauthorityontario.ca, as the regulatory framework has been refined over time.

Common Expenses (Condo Fees) and Special Assessments

• Common expenses, commonly called condo fees or maintenance fees, are the owner's proportionate share of the cost of operating the corporation and funding the reserve. Each unit's share is set by the declaration (often as a percentage). Fees are typically billed monthly.
• Fees generally cover items such as building insurance for the common elements, common-area utilities, maintenance, management, and reserve-fund contributions. What is and isn't included varies by corporation — always confirm from the budget and declaration.
• A special assessment is an extra charge levied on owners (on top of regular fees) when the corporation needs funds beyond its budget and reserve — for example, an unexpected major repair or a reserve-fund shortfall. Special assessments can be substantial and are a key risk a buyer's lawyer looks for in the status certificate.
• For mortgage-qualification purposes, lenders typically count 50% of condo fees in the buyer's debt-service ratios (see the mortgages reference).

Declaration, By-laws, and Rules

A condominium is governed by a hierarchy of documents, each included with the status certificate:

• Declaration — the constitutional document. It defines the units and common elements, sets each unit's proportionate share of common expenses and voting, and establishes fundamental restrictions. Amending it generally requires a high owner-approval threshold.
• By-laws — govern the corporation's internal administration (board size and election, financial and management matters, standard-unit definitions). By-laws are passed by the board and confirmed by owners.
• Rules — regulate the use and enjoyment of units and common elements (e.g., noise, pets, parking, use of amenities). Rules are passed by the board and take effect subject to owners' right to requisition a meeting.

Buyers should read these carefully for restrictions that affect their intended use — common examples include pet restrictions, rental/leasing restrictions, short-term-rental (e.g., Airbnb) prohibitions, smoking bans, and alteration/renovation rules.

The Condo Agreement of Purchase and Sale (OREA Form 101)

For a resale condominium in Ontario, the standard agreement is the OREA Standard Form 101 — Agreement of Purchase and Sale, Condominium Resale. Compared with the freehold form, Form 101 adds condo-specific provisions, including:

• Identification of the unit plus exclusive-use or owned parking and locker interests.
• Common expenses (condo fees) and what they include.
• A status certificate clause and provisions dealing with the management of the condominium.
• Provisions addressing the proportionate share and adjustments on closing (including apportioning common expenses to the closing date).
• Title and title-search provisions adapted for condominium ownership.

Form 101 is typically used together with a schedule containing the buyer's conditions — most importantly the status-certificate review condition described above, and any financing/inspection conditions. Always use the current OREA form and rely on a lawyer for clause wording; forms are periodically revised.

Quick Due-Diligence Checklist for Realtors

• Order the status certificate early; remember the corporation has up to 10 days and can charge up to $100 incl. HST.
• Have the buyer's lawyer review the certificate under a proper condition.
• Check the reserve fund balance vs. the reserve-fund-study recommendation.
• Look for special assessments, fee increases, and arrears on the unit.
• Confirm rules/by-laws on pets, rentals, short-term rentals, and alterations match the buyer's plans.
• Confirm what the condo fees include and how parking/lockers are held (owned vs. exclusive-use common element).

Reference text, not legal or financial advice. Fee caps, timelines, and study intervals are governed by the Condominium Act, 1998 and its regulations and may change — verify current requirements at ontario.ca/e-Laws and condoauthorityontario.ca, and confirm APS clauses with a licensed Ontario real estate lawyer.