Understanding what triggers an assessment
Special assessments happen when the reserve fund is not enough to cover a needed repair or the corporation faces an unexpected cost. Unlike monthly maintenance fees, these are often due as a lump sum or over a short payment schedule set by the board.
Paying from savings or a personal line of credit
For smaller assessments, using savings or an existing personal line of credit may be the simplest option, avoiding the cost and paperwork of a formal mortgage product.
Refinancing or a second mortgage for larger amounts
For larger assessments that stretch into the tens of thousands, refinancing the unit's existing mortgage or arranging a small second mortgage can spread the cost over time rather than draining savings all at once.
- Best for assessments too large for savings
- Spreads repayment over a longer period
- May require lender approval of the condo corporation
Some corporations offer their own financing
In certain cases, the condo corporation itself arranges financing for the building's repair and adds the repayment to monthly fees over several years, which can be a lower cost alternative to individually financing your unit's share.
Frequently asked questions
- Can I get a mortgage to pay a condo special assessment?
- Yes, refinancing or a second mortgage on your unit is a common way to cover a large special assessment without depleting savings.
- Does a pending special assessment affect my ability to sell my condo?
- It can, since buyers and their lenders will want disclosure of any known or upcoming assessments before closing a purchase.
- Should I check the reserve fund study before buying a condo in Toronto?
- Yes, reviewing the reserve fund study and status certificate before purchase can help you anticipate whether a special assessment may be coming.