Why Do Condo Fees Keep Rising in Ontario — And How to Tell If a Fee Is Reasonable
Understand the reserve fund, the status certificate, and the special assessment before a low monthly fee fools you
What do Ontario condo maintenance fees actually pay for, and why do they keep going up?
Your condo fee (the common expense fee) pays to run the building’s shared parts — building insurance, utilities for common areas, property management and staff, cleaning, amenities — and, most importantly, the reserve fund contribution that saves up for major repairs like the roof, cladding, and elevators. Fees keep rising mainly because insurance and inflation are climbing, buildings age, and the reserve fund must be topped up to the level a legally required study demands.
Source: Condominium Authority of Ontario (2025)
Most buyers treat the condo fee as “lower is better” — but an artificially low fee often means a starved reserve fund, and the real bill just gets pushed a few years down the road into a special assessment. Here’s what the fee actually pays for, why it rises, and how to tell a cheap fee from a healthy one.
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What Your Condo Fee Actually Pays For
According to the Condominium Authority of Ontario (CAO, 2025), your condo fee — the common expense fee or maintenance fee — keeps the building’s shared elements running: the garage, hallways, lobby, elevators, gym, and pool. It typically covers:
• Building insurance (fire and liability on the structure — not your own in-suite contents policy)
• Utilities for common areas, and in some buildings in-suite heat and water too
• Property management and staff (management company, concierge, on-site maintenance)
• Cleaning and day-to-day upkeep
• Amenities (elevators, pool, fitness room)
• And, critically, the reserve fund contribution set aside for major future repairs
💡 The single most important line in your fee isn’t the service you can see today — it’s the reserve fund contribution you can’t. It decides whether this building repairs its roof calmly in ten years, or hands you a five-figure bill overnight.
Step 1: What the Reserve Fund Is — and Why It’s the Law
Step 2: The Reserve Fund Study — Roughly Every Three Years
• Class 1 (comprehensive): completed within the first year after the corporation is registered
• Class 2 / Class 3 (updates): done on an alternating basis, at least every three years
The board must review the study within 120 days and set a funding plan so the fund is adequate by the following fiscal year — which frequently means a fee increase.
ℹ️Tip: what a fee includes varies a lot from building to building. Some cover heat and water, some don’t. Before you compare two buildings’ monthly fees, confirm what each one actually includes — otherwise you’re comparing apples to oranges.
Step 3: Why Fees Keep Rising — Four Real Drivers
• Soaring insurance premiums: condo building insurance has jumped sharply in recent years and is one of the heaviest pressures on fees
• Inflation and utilities: labour, cleaning, and energy all cost more
• Aging buildings: the older the building, the more frequent the repairs and the faster the reserve drains
• Reserve catch-up: if past contributions fell short, a new study forces the fund to be topped up — and the fee jumps to fund it
Step 4: Beware the Artificially Low Fee in a New Building
🚨The costliest mistake: buying purely because the fee is low. A low fee that’s starving the reserve can turn into a five-figure special assessment within a few years. Always read the reserve fund study’s conclusion before you buy.
💡 A low fee is not the same as cheap. If it’s low because the reserve fund is being starved, the money you “save” each month comes back as a special assessment — a one-time charge levied on every owner to fund a major repair the reserve can’t cover, often running into the tens of thousands. The genuinely cheaper choice is a fully funded, healthy fee.
Step 5: The Four Documents to Read Before You Buy
• Status certificate: per the CAO (2025) and section 76 of the Condominium Act, the corporation must provide it within 10 days of your request, for a maximum fee of $100 (including tax). It states the reserve fund’s status, the current budget, whether the unit is in arrears, and whether any special assessments apply
• Reserve fund study: does it call the fund adequate, or demand a steep contribution increase?
• Annual budget: see where the money goes and how much flows to the reserve
• Fee history and per-square-foot comparison: measure this building’s cost per square foot against comparable buildings in the same area
⚠️According to the CAO (2025), a recent court decision found that if a special assessment or fee increase is not clearly disclosed in the status certificate, a buyer can be exempt from paying their share. The status certificate isn’t a formality — it’s your legal protection, so read it line by line.
A Framework: Cheap Fee vs Healthy Fee
Two units can both charge $600 a month and mean completely different things. Three quick questions sort them out:
• Is the reserve funded? If the study calls it adequate and isn’t demanding a sudden steep contribution hike — that’s a healthy sign
• Are increases steady? Gentle, inflation-tracking increases beat a fee that sits flat for years and then spikes
• Is the right stuff included? A “cheap” fee that excludes heat and water, or that cut its reserve contribution, isn’t actually cheap
Bottom line: a slightly higher fee with a well-funded reserve and steady increases beats a low fee propped up by a starved reserve. The first spreads repair costs evenly over the years; the second leaves the bomb for future you.
Frequently Asked Questions
How often is a reserve fund study required in Ontario?
According to the Condominium Authority of Ontario (2025), a Class 1 comprehensive study must be completed within the first year after the corporation is registered. After that, Class 2 and Class 3 update studies alternate and must be done at least every three years. The board must review the study within 120 days and set a funding plan.
Is a condo with lower maintenance fees a better buy?
Not necessarily. If the fee is low because the reserve fund contribution has been cut, the building is just deferring major-repair costs — which often return as a one-time special assessment. What matters isn’t whether the fee is high or low, but whether the reserve is adequately funded, whether increases are steady, and whether the right items are included.
What is a special assessment?
When the reserve fund can’t cover a major repair — a roof, cladding, or elevators, for example — the corporation levies a one-time extra charge on every owner. That’s a special assessment, and it can run from a few thousand to tens of thousands of dollars. Reading the status certificate before you buy is how you catch a known assessment early.
Do I need to read the status certificate before buying a condo?
Strongly recommended. Per the CAO (2025) and section 76 of the Condominium Act, the corporation must provide the status certificate within 10 days of a request, for a maximum of $100 including tax. It discloses the reserve fund’s status, the current budget, whether the unit is in arrears, and whether any special assessment applies — the core document for judging the building’s financial health. Consider protecting yourself with a status-certificate condition in your offer.
Why have condo fees risen so fast in recent years?
Four drivers stack up: sharply rising building-insurance premiums, inflation pushing up labour and utilities, aging buildings needing more repairs, and underfunded reserve funds that must be topped up when a new study lands. Together, these explain the year-after-year increases buyers are seeing.
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · GUILD Elite
VP & Branch Manager, Bay Street Group Inc.
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