Special assessment특별 부과금

What is it?

A special assessment is money a condo corporation collects from owners on top of the monthly condo fees (common expenses). It is used when the yearly budget or the reserve fund cannot cover a big cost.

The Condominium Authority of Ontario (CAO) describes it as an extra one-time charge added to the owners’ common expenses fees. Typical reasons: a major piece of equipment fails earlier than expected, a budgeted repair costs much more than planned, or the corporation is involved in a lawsuit and must pay legal costs.

Who decides? Do owners vote?

The condo board decides. According to the CAO, a board can levy a special assessment without getting permission from the owners. If the corporation’s governing documents (declaration, by-laws and rules) say something about special assessments, the board must follow those provisions.

Owners cannot vote it down, but owners of at least 15% of the units can requisition an owners’ meeting (Condominium Act, section 46), and owners have the right to examine the corporation’s records. Ask why the money is needed and why the reserve fund was not enough.

How much is my share?

Section 84 of the Condominium Act says owners contribute to the common expenses in the proportions set in the declaration. A special assessment is split the same way. If your unit’s percentage for condo fees is 0.5%, you pay 0.5% of the total assessment.

The corporation tells each owner the amount and how to pay. The board sets whether it is paid at once or in instalments, so read the notice. The law does not let you skip it because you do not use the amenities or because you have a claim against the corporation (section 84 (3)).

Example only. Your real percentage is in the condo declaration and the amount is in the board’s notice.

What if I do not pay?

A special assessment is part of the common expenses, so not paying it is the same as not paying condo fees. Under section 85 of the Condominium Act, the corporation gets a lien (a claim registered against your home until the debt is paid) on your unit for the unpaid amount, interest and the reasonable legal costs of collecting it.

The lien expires if the corporation does not register a certificate of lien within three months of the default, but once registered it must be paid before you can sell or refinance. The CAO notes that a corporation may be able to seize and sell the unit to recover what it is owed.

Who pays if it is levied while I am buying?

When you buy a condo you get a status certificate. It must state any increase in common expenses the board has declared since the current budget, and any assessments levied against the unit to increase the reserve fund, with the reasons (Condominium Act, section 76 (1) (b) and (c)). The certificate binds the corporation as of its date (section 76 (6)). That makes it hard for a corporation to charge a buyer for an assessment the certificate did not disclose.

The CAO points to a recent Ontario Superior Court of Justice decision in which a buyer did not have to pay their share of a special assessment because the status certificate did not clearly note it.

If a new assessment is levied after the certificate date but before closing, your purchase contract, not the law, decides who pays. The standard condo resale agreement usually has a clause on this, but the wording varies from deal to deal. When you write the offer, have your lawyer add clear words such as “any special assessment levied or announced before closing is the seller’s responsibility.”

Warning signs to check before you buy

• A small reserve fund, or a reserve fund study that recommended big contribution increases the board has not adopted.
• Status certificate entries about plans to increase the reserve fund (section 76 (1) (m)), proposed major work not yet done (section 76 (1) (n)) or ongoing litigation (section 76 (1) (h)).
• An older building that has not yet done big-ticket work such as the garage, exterior walls, windows or elevators.
• Condo fees that are much lower than similar buildings. It looks good now, but the money may be collected all at once later.
• Owners’ meeting minutes that keep mentioning assessments, loans or lawsuits. Your lawyer reviews the minutes with the status certificate.

What an owner can do

• Ask the board in writing for the reasons and the supporting documents (quotes, reserve fund study, budget). You have the right to examine the corporation’s records.
• Owners of at least 15% of the units can requisition an owners’ meeting to question the board and, if needed, replace directors.
• The Condominium Authority Tribunal (CAT) does not hear budget or financial disputes. If you believe the assessment itself is improper, talk to a lawyer about a court application (Condominium Act, section 134).
• Pay by the deadline even while you dispute it. Non-payment adds a lien, interest and legal costs.

Example