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Special Assessments

Buying a condominium ("condo") comes with many benefits to Buyers, such as flexibility, affordability, and access to outstanding amenities. These amenities are usually maintained through maintenance fees paid by the condo unit owners. However, problems arise when unexpected repairs need to be made and the condo corporation does not have enough money to cover these expenses. The corporation can then decide to levy what is known as "special assessments." In today’s blog post, we will examine special assessments, situations in which they arise and how Buyers can stay protected.


What is a special assessment?

A special assessment occurs when a condo corporation charges condo owners for repairs that need to be made to the condo building because the reserve fund is insufficient to cover these expenses. Simply put, a special assessment is an additional financial burden on condo owners.


Reasons for Special assessments

The Board of Directors of a condo may levy special assessment for a number of reasons:


  • Unforeseen expenses: A special assessment may be levied when unexpected expenses arise which have not been budgeted for under the reserve fund.

  • Low Budget and Low Reserve Fund: Where the reserve fund or budget for a condo project is low, the Board may levy special assessments to cover up the cost.

  • Lawsuit: Where there is any judgment against the condo corporation and the available funds cannot cover the costs, the Board can levy a special assessment to cover the costs.


Condo unit owners would have to pay their portion of special assessments, otherwise, the condo corporation could place a lien on their unit, and they may eventually lose it. It is also important to note that some by-laws of condo corporations give the Board the discretion to charge special assessments without seeking input or permission from the condo owners.


How can Buyers stay protected?

When Buyers purchase a condo unit, they also indirectly take a gamble on the whole condo building and its management. It is very important for Buyers to be in financial control, without having to pay unexpected special assessments in addition to their monthly fees.

Buyers can therefore stay protected in the following ways:


  • Status Certificate: The best way to stay protected is to thoroughly review a document known as the status certificate, which was discussed in our previous post. This document will inform the Buyer of the financial and legal state of the condo building before purchasing a unit.

  • Reserve Fund Study: Another way to stay protected is to examine a document known as the "reserve fund study", which shows whether there are available funds for repairs and expenses.

  • Title Insurance: Finally, Buyers can stay protected by purchasing title insurance, which would protect them against special assessments that have not been disclosed in the Status Certificate.

It is advisable for a lawyer to examine these documents so that all the legal issues and concerns are spotted before finalizing a purchase.


At Northview Law, we would love to discuss any questions about how a special assessment might affect you, and any other real estate concerns you may have. You can book a free consultation with Northview Law by following this link, or contact us at 416-639-7639. We look forward to hearing from you soon.