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New Provincial Tax to Educate Ontario Condo Owners Promises No More Buyer Beware

Ontario condo owners will soon be subject to a new monthly tax.  While this may sound like a negative development, leaders in the condo industry and experienced condo owners are certain it is not. This revision to Ontario’s Condominium Act, which could cost condo owners as low as a dollar per month, is set to be in place by late 2017. The fee will be used to educate condo owners through various means, on subjects like good builder practices, condo owner rights and appropriate condo management expectations.

According to the Ontario government, Condo owners in the province are in need of education about condo living. Leading research shows that condo residents in Ontario are less educated about their chosen form of housing than renters and those who purchase single-family homes. The province is convinced that this has led to an increase in lower tier condo communities where condo builders, corporations and management teams, do not put their Condo residents first and, in fact, more often than not, take advantage of them.

While no one likes paying more tax, most people familiar with the pitfalls of the condo industry in Ontario, are more than happy to cough up the price of a bottle of water a month if that means condo owners in the province will be better educated on matters pertaining to their home of choice.  When condos are not built or managed properly, the industry gets a bad rap and those with tried and true, sound building and management practices are impacted in terms of sale-ability of units, buyer trust, and owner cooperation. The old adage, “A little leaven, leaven’s the loaf,” is incredibly apropos when it comes to the world of condo building and management in Ontario.

When a condo building is not well-built or well managed, condo owners pay a steep price, figuratively and literally. Faulty and unsafe building practices, community upheaval about what maintenance initiatives to support, special assessments that cost thousands, all of these issues arise when a condo builder or condo management team are not behaving ethically. Condo owners are emotionally drained, faced with infighting and potential legal battles against builders and management, not to mention the financial drain when they are forced to pay giant sums of money in assessments or lose thousands of dollars when they have to sell their unit in an issue plagued building for less than purchase price.

Jeffrey Jacobson*, a young professional who owned a boutique condo in the upscale Summerhill area of Toronto, knows the pitfalls of buying a condo without proper buyer/owner education all too well. Following street signage, Jacobson and his wife walked into a small office building repurposed as a condo development and bought a unit directly from the builders, a small real estate law firm. “My wife and I thought we purchased our dream home condo and within six months it had turned into a nightmare with unsafe building practices, dishonest management, and a special assessment of over $40,000 per unit. To avoid bankruptcy we had to sell our unit for less than $50,000 of what we bought it for.”

Stories like Jeffrey Jacobson’s are a little extreme, but they happen and it is these kinds of horrific condo buyer/owner experiences that the Province is trying to help Ontarians avoid. Jacobson thinks this new tariff and what the education it offers should be considered a gift to condo owners across the province. “I only wish my wife and I had, had the opportunity to be a part of such a program. The dollar a day would have saved me over $90,000. I also wish we had used a real estate agent who would have helped us vet the builders and find a condo building that was well-built and well-managed.”

While the new condominium tariff and corresponding education initiatives will not be in full force until late 2017, Ontario condo buyers can protect themselves right now by taking note of Jeffrey Marcus’ experience and heeding his advice to consult an experienced real estate professional before buying a condo. Things are looking up for condo owners in Ontario with better condo building and management practices expected to be on the rise thanks to these new regulations. In the meantime, if you are about to buy a condo in Ontario, make sure you work with a trusted real estate agent who knows the industry well and can educate you on reputable builders, solid building practices and good condo management.


Lara Watson is a journalist and real estate aficionado living in Toronto.


* Name has been changed

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Toronto Real Estate Board - IDX Last Updated: 12/13/2018 8:44:29 PM