In short
A healthy reserve fund means fewer surprise special assessments for owners.
A low one can mean higher fees or a big bill down the road.
How reserve funds work in Ontario
Every Ontario condo corporation must keep a reserve fund, a separate account used only for major repairs and replacements of the common elements and assets. Think roofs, elevators, windows, balconies, boilers and parking garages.
Part of each owner's monthly condo fee goes into the fund. The goal is to have enough money when each big project comes due, so owners aren't hit with surprise bills.
The fund belongs to the corporation, not to individual owners. When you sell your unit, your past contributions stay with the building and benefit the next owner, just as you benefit from what earlier owners paid in.
Reserve fund studies
How much is enough is set by a reserve fund study, prepared by a qualified professional. It lists the building's major components, estimates when each will need work and what it will cost, and recommends a funding plan.
Under the Condominium Act, 1998 and its regulations, a new corporation must complete a comprehensive study within its first year after registration. After that, updated studies alternate between ones with a site inspection and ones without, at least every three years.
Once the board receives a study, it has 120 days to propose a plan for future funding, and must send owners a notice summarizing the study and the plan within 15 days after that.
When the reserve fund falls short
If the reserve fund can't cover upcoming work, the corporation may raise condo fees, borrow, or charge a special assessment, a one-time bill to each owner.
A big balance alone doesn't prove a building is healthy. What matters is whether contributions keep pace with the study's forecast.
Older buildings, or buildings that kept fees low for years, are more likely to face catch-up increases. Comparing fees with similar buildings without checking the reserve fund can be misleading.
How to check before you buy
The status certificate shows the current reserve fund balance, the date of the last study, the plan for future funding, and any known special assessments. Have your lawyer review it before your offer is firm.
Common questions about reserve fund
How often does a condo need a reserve fund study in Ontario?
At least every three years. A new condo corporation must complete a comprehensive study within its first year after registration, then updated studies alternate between ones with a site inspection and ones without, at least every three years. The status certificate shows the date of the most recent study.
What is a special assessment?
A special assessment is a one-time charge to condo owners to cover a cost the reserve fund or budget can't. It's often for a major repair. Each owner pays their share based on the proportions in the condo's declaration. The status certificate discloses any special assessment the corporation already knows about.
How do I know if a condo's reserve fund is healthy?
Compare the reserve fund balance and contributions with the funding plan in the latest reserve fund study. A healthy fund is on track to pay for upcoming major repairs without big fee jumps or special assessments. Your lawyer reviews this in the status certificate and can flag concerns.
What does the reserve fund pay for?
The reserve fund pays for major repair and replacement of the common elements and assets, like roofs, elevators, windows, mechanical systems and parking garages. Routine maintenance and daily operating costs come from the operating budget, not the reserve fund. The reserve fund study lists which components it covers.
Sources
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.