June 26, 2026
What if the biggest cost of owning a condominium isn't the purchase price, but the bills that arrive twenty years later?
Millions of Canadians believe they're buying a home. In reality, many are entering a long-term financial partnership with hundreds of strangers—one that may carry legal and financial obligations for decades. Before buying a condominium, every Canadian should understand how the system really works.
Millions of Canadians Believe They Own Their Home…
Yet many are actually entering a long-term financial partnership with hundreds of strangers—one that carries legal and financial liabilities that may last for decades.
For most Canadians, purchasing a condominium represents a major milestone: the first step toward home ownership, financial independence, and building equity.
What many buyers discover years later is that condominium ownership is fundamentally different from owning a traditional detached house.
Unlike a detached home, where maintenance decisions rest primarily with the individual owner, condominium ownership means sharing legal and financial responsibility for an entire building. Every elevator, roof, parking garage, heating system, balcony, hallway, and structural component eventually becomes a collective obligation.
Many buyers understand the mortgage.
Far fewer understand the long-term liabilities.
Buying a condominium is not simply buying real estate. It is buying into a corporation whose financial health may affect your own for decades to come.
How Canada Arrived Here
Before the mid-1970s, developers commonly built purpose-built rental apartment buildings. They retained ownership, rented the units, maintained the properties, and accepted the long-term operational risks associated with owning them.
Over time, however, rent controls, rising construction costs, inflation, higher interest rates, taxation changes, and increasing regulation made that business model far less attractive.
Condominiums offered developers an entirely different business model.
Instead of holding apartment buildings for decades and recovering their investment slowly through rental income, developers could pre-sell individual units, recover their construction costs quickly, realize their profits, and move on to the next project.
The business risk changed.
More importantly, who carried that risk changed.
The long-term obligations once carried by developers were quietly transferred to ordinary Canadians.
Few people recognize just how significant this transformation has been.
The False Sense of Ownership
Many purchasers believe:
"I own my condo."
Technically, they own their individual unit.
But they also jointly own—and must jointly finance—the maintenance and eventual replacement of:
- Elevators
- Roofs
- Underground parking garages
- HVAC systems
- Plumbing and electrical infrastructure
- Building envelopes
- Balconies and railings
- Windows
- Hallways and common areas
In effect, every owner enters a long-term financial partnership with hundreds of people they may never meet.
The decisions made by a volunteer condominium board—and the financial circumstances of fellow owners—can directly affect everyone's future costs.
Who Really Owns the Building?
One of the greatest misunderstandings surrounding condominium ownership is the belief that owners control their property's future in much the same way as someone who owns a detached house.
They do not.
While owners possess legal title to their individual unit and an undivided interest in the common elements, many major financial decisions are made collectively through the condominium corporation under provincial condominium legislation.
Future maintenance schedules, reserve fund contributions, major capital projects, and increases in condominium fees are determined through the governance of the corporation.
Individual owners remain legally responsible for paying their share—even if they personally opposed the decision.
That is one of the fundamental differences between owning a detached house and owning a condominium.
The Costs That Never Stop
First-time buyers usually calculate:
- Mortgage payments
- Property taxes
- Insurance
- Utilities
Far fewer fully anticipate the continuing financial obligations that accompany condominium ownership.
Monthly condominium fees generally rise over time as labour costs, utilities, insurance premiums, inflation, and maintenance expenses increase.
More significant, however, are special assessments.
When reserve funds prove insufficient to pay for major repairs, condominium corporations may levy mandatory lump-sum assessments against every owner.
These assessments can range from several thousand dollars to well over $100,000 per unit.
They are not optional.
Failure to pay may result in a lien being registered against the unit and, in extreme circumstances, legal proceedings that could ultimately lead to the loss of the property.
The Twenty-Year Reality
Most condominium buildings perform well during their early years.
Developers naturally focus on delivering attractive buildings that perform well during the initial sales period.
The largest expenses typically emerge between years 15 and 25, when major building systems begin reaching the end of their service lives.
These commonly include:
- Elevator modernization
- HVAC system replacement
- Roof replacement
- Balcony and railing reconstruction
- Underground garage waterproofing and structural repairs
- Plumbing upgrades
- Window replacement
- Building envelope rehabilitation
Most buyers inspect the kitchen, bathrooms, flooring, and view.
Very few carefully examine the reserve fund, engineering reports, or projected capital expenditures that may ultimately cost far more than the finishes inside the unit.
Thousands of condominiums built during Canada's building boom between 2000 and 2010 are now entering this critical stage.
This is not simply an issue affecting individual buildings.
It represents a national infrastructure challenge quietly emerging across Canada's condominium sector.
Who Pays?
| Cost Factor | Condominium Ownership | Purpose-Built Rental |
|---|---|---|
| Major Capital Repairs | Individual owners through fees and special assessments | Building owner |
| Reserve Funding | Paid by owners | Paid by owner |
| Roofs, Elevators, Garages | Owners ultimately pay | Owner pays |
| Monthly Fees | Increase as costs rise | Included within rent structure |
| Long-Term Risk | Shared among owners | Managed by building owner |
The distinction is simple.
Someone always pays.
The question is who.
The Condo Myth
For decades Canadians have heard a familiar message:
"Buying is always better than renting."
The reality is more nuanced.
Buying a well-managed condominium with a healthy reserve fund may be an excellent long-term investment.
Buying into an aging building with inadequate reserves may expose owners to financial risks many renters never experience.
The question is not whether buying is always better than renting.
The real question is whether buyers fully understand what they are buying.
The Strategic Pivot Back to Rentals
Ironically, many developers are now shifting back toward purpose-built rental housing.
Why?
Because today's market conditions increasingly favour rental construction.
Developers no longer depend as heavily on achieving 70 to 80 percent condominium pre-sales before obtaining financing.
Government incentives for rental construction, including tax measures and accelerated approvals, have made rental projects increasingly attractive.
Institutional investors are also willing to finance buildings that generate stable, long-term rental income.
In many respects, the risk model has come full circle.
The building owner—not hundreds of individual households—once again assumes responsibility for major long-term repairs.
Before Buying a Condominium
Before signing a purchase agreement, every buyer should carefully examine the financial health of the condominium corporation—not just the appearance of the unit.
Key documents include:
- The Status Certificate
- The Reserve Fund Study
- Engineering reports
- Board meeting minutes
- Pending lawsuits
- Planned major repairs
- Historical special assessments
- Reserve fund funding ratios
- Trends in condominium fee increases
Pay particular attention to warning signs such as repeated special assessments, significant fee increases, deferred maintenance, frequent board turnover, or reserve funds that appear insufficient for future obligations.
The financial condition of the corporation may ultimately matter more than the granite countertops inside the unit.
A Question for Governments
Recent discussions about governments purchasing unsold condominium units from developers raise an important public policy question.
If taxpayers are expected to assume risks associated with unsold condominium inventory, should equal attention also be given to the long-term financial challenges already facing millions of existing condominium owners?
More broadly, should public policy encourage housing models that increasingly transfer long-term financial risks to individual households—or models that place those risks with professional owners better positioned to manage them?
These are legitimate questions deserving thoughtful public debate.
Conclusion
Condominiums have helped millions of Canadians achieve home ownership and will continue to play an important role in Canada's housing future.
It is a long-term legal and financial commitment to share the maintenance, governance, and liabilities of an entire building.
Home ownership should provide security, not unexpected financial shocks.
Before buying a condominium, prospective owners should look beyond granite countertops, designer kitchens, and attractive views.
The most important features of any condominium may be hidden inside its engineering reports, reserve fund study, and financial statements.
But every major financial decision deserves informed consent.
Buyers should understand not only the purchase price, but also the long-term responsibilities that come with ownership.
Whether purchasing a condominium, a detached home, or any other significant investment, the same principle applies: ask the difficult questions before signing, not after.
Because informed citizens make better decisions, stronger communities, and ultimately a more resilient country.
Knowledge costs little. Ignorance can cost a lifetime.
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Thanks for your thoughts, comments and opinions, will be in touch. Peter Clarke