Condo Building Glossary

The savings account that every condo corporation must maintain to cover major capital repairs and replacements. Reserve funds pay for things like roof replacement, elevator modernization, underground parking waterproofing, and HVAC system upgrades. Under Ontario's Condominium Act, contributions are determined by a reserve fund study. A well-funded reserve is one of the most reliable indicators of a financially healthy building. An underfunded reserve is one of the biggest financial risks a condo buyer can take on.

A one-time charge levied on all unit owners when the reserve fund doesn't have enough money to cover an urgent or unexpected capital expense. Special assessments can range from a few hundred dollars to tens of thousands of dollars per unit, depending on the cost of the repair and the number of units sharing it. They're disclosed in the status certificate if already approved. A history of special assessments, or a pending one, is a red flag about the building's financial management.

A legal document that every Ontario condo corporation must provide to a buyer upon request, for a fee of no more than $100. It contains the current maintenance fee, any arrears on the unit being sold, the reserve fund balance and study, the annual budget, any outstanding judgments or litigation against the corporation, and the declaration, by-laws, and rules. Buyers in Ontario have ten days to review the status certificate after receiving it. A condo lawyer should review it before the buyer waives conditions.

The professional property management firm hired by the condo board to oversee day-to-day building operations. Responsibilities typically include financial reporting, vendor management, staff supervision, maintenance coordination, and communications with unit owners. The management company is not the same as the board — the board is elected by owners and provides governance direction. The management company executes it. Frequent management company changes (every two to three years) often signal governance problems.

Everything in the condo building that isn't part of an individual unit. Common elements include hallways, lobbies, elevators, stairwells, parking areas, amenity rooms, outdoor terraces, and mechanical rooms. Every owner has a proportional interest in the common elements based on their unit factor (a percentage defined in the declaration). The cost to maintain, repair, and eventually replace common elements is funded through maintenance fees and the reserve fund.

The monthly fees every condo owner pays to the corporation, more commonly called maintenance fees. They cover operating expenses for common elements (insurance, utilities, cleaning, repairs), property management fees, and the reserve fund contribution. "Common expenses" is the legal term used in Ontario's Condominium Act; "maintenance fees" is the common market term for the same thing.

Unpaid maintenance fees. A unit in arrears means the owner hasn't paid their common expenses. The status certificate discloses whether the unit being sold has any arrears. If it does, this is typically the seller's responsibility to clear before closing, though how this is handled should be confirmed with your lawyer. Arrears across the building as a whole (not just the one unit) can affect the corporation's cash flow and are a sign worth investigating beyond what the status certificate alone shows.

The monthly amount a condo owner pays to the corporation to cover building operating costs and reserve fund contributions. Expressed per square foot in the market (typically $0.55 to $1.50+ in Toronto) or as a total monthly dollar amount. Maintenance fees are set annually by the board based on the operating budget and reserve fund study. They are not equivalent to rent — they don't go to a landlord, they fund the collective costs of owning the building together.

The professional service that handles day-to-day building operations. In condo contexts, property management companies are hired by the board and paid from the operating budget. Their fee is a line item in the budget. Property management is distinct from the board of directors, which is elected by owners and is responsible for governance. The management company reports to the board. Good management and a stable, engaged board are both necessary for a well-run building.

The meeting at which a newly registered condo corporation's control transfers from the developer to the elected board of directors. This must happen within 21 days of the developer losing majority unit ownership. The turnover meeting is significant because it's the point at which owners gain control of the corporation and can commission their own reserve fund study and audit. The developer's first-year budget often underestimates costs, and the first elected board frequently has to increase fees.

The operating budget set by the developer for the first year after a condo building registers. Under Ontario law, the developer must prepare this budget and is responsible for any shortfall in operating costs during the first year. However, the developer's incentive is to set the maintenance fee low to make units easier to sell. The first elected board often finds the budget was optimistic, and fee increases of 15–25% in year two are common in newly registered buildings.

The annual meeting of the condo corporation at which owners vote on board members, receive financial statements, and address matters affecting the corporation. Ontario's Condominium Act requires an AGM within six months of the corporation's fiscal year end. AGM minutes are typically attached to the status certificate and are a valuable source of information about the corporation's history, decisions, disputes, and financial trends. Low AGM attendance often correlates with low owner-occupier rates.

The elected group of unit owners responsible for governing the condo corporation. The board makes decisions about operations, maintenance, budgets, reserve fund management, and management company appointments. Most boards have three to five members elected annually at the AGM. Board quality varies widely. An engaged, financially literate board that communicates transparently with owners is one of the most reliable signs of a well-run building. A board that avoids difficult decisions, especially reserve fund contributions, is a risk factor.

The founding document of a condo corporation. It defines what is part of each unit versus what is common element, establishes each unit's proportional interest (unit factor), and sets out fundamental rules about how the corporation operates. The declaration is difficult to change — amendments typically require the consent of 80% of unit owners. It is registered on title and is part of the status certificate package. Restrictions on unit use (short-term rentals, for example) sometimes appear in the declaration rather than the rules.

The operational rules governing how owners and residents use their units and the common elements. Rules cover things like move-in and move-out procedures, noise restrictions, amenity booking, pet policies, and short-term rental restrictions. Unlike by-laws, rules can be created or amended by the board without owner approval, though owners can requisition a meeting to repeal them. Current rules are attached to the status certificate and should be reviewed before buying, especially if you plan to rent the unit or have pets.

Corporate rules that govern the structure and operation of the condo corporation itself — matters like board election procedures, quorum requirements, and meeting protocols. By-laws can only be amended by owner vote (at minimum a majority, and sometimes more depending on what's being changed). By-laws are attached to the status certificate. They're less relevant to most buyers' day-to-day experience than the rules, but are important if you're ever considering running for the board or challenging a decision.

The legal entity that owns and manages the common elements of a condo building. Every unit owner is automatically a member of the corporation and has a vote proportional to their unit factor. The corporation has its own finances, can enter contracts, and can sue or be sued. When you buy a condo unit in Ontario, you're simultaneously buying a fractional ownership stake in the condo corporation. This is why the corporation's financial health matters so directly to individual unit owners.

Canada Mortgage and Housing Corporation, the federal agency that provides mortgage insurance for high-ratio mortgages (where the buyer's down payment is less than 20%). CMHC-insured mortgages have their own rules about what properties qualify — buildings with certain characteristics (very high investor ownership, short-term rental dominance, or financial distress indicators) can be flagged as non-qualifying, which affects the financing options available to buyers in that building. verify with current sources

A legal claim registered against a unit's title by the condo corporation when an owner fails to pay their common expenses. Under Ontario's Condominium Act, the corporation can register a lien within three months of an owner falling into arrears, which gives the corporation priority over most other creditors. A lien must be disclosed in the status certificate. A buyer purchasing a unit with a lien against it should confirm with their lawyer how the lien will be discharged before or at closing.

The condo corporation's annual financial statements, reviewed and signed off by an independent chartered accountant. Ontario's Condominium Act requires condo corporations to have their financial statements audited annually (with some exceptions for very small corporations). The audited financials are distributed to owners at the AGM and are part of the status certificate package. Clean, straightforward financials with consistent reserve fund contributions are a positive sign. Qualifications or notes from the auditor about reserve fund adequacy are worth investigating.