Condo buyers & owners – understanding special levies

If you’re a condo owner or prospective buyer in Canada, you need to know what special levies (also known as special assessments) are and how they affect your financial planning.

In British Columbia alone, the Eli Report team estimates that 130,000 condo owners will face special levies averaging nearly $7,500 per unit in 2025. That’s a potential $1 billion financial impact on BC condo owners this year.

So, we’re here to help you understand what a special levy is, how they work, how to determine their potential impact on you as a buyer or owner. Ultimately, you’ll have confidence on how to navigate special levies by the end of this article.

What is a Special Levy?

A special levy (also called a special assessment in some provinces) is an additional payment collected from condo owners beyond regular monthly fees to fund capital expenses that are not covered by available reserve funds. Whether you’re in British Columbia’s strata system, Alberta’s condominium framework, Ontario’s condo regulations, or Quebec’s co-ownership model, these unexpected costs can significantly impact your household budget.

This guide explains how special levies work across Canada, how they’re calculated, what triggers them, and—most importantly—how you can prepare for them financially. We’ll cover everything from provincial differences to practical strategies for both buyers and current owners.

How Special Levies Work

Special levies are initiated for specific purposes that fall outside regular budgeted expenses and beyond available reserves. Here’s how the process typically works:

Common Reasons for Special Levies

Special levies are typically approved for:

1. Major Building Repairs: Roof replacement, building envelope remediation, plumbing system upgrades, parking structures or membranes
2. Emergency Repairs: Water damage restoration, structural issues requiring immediate attention
3. System Upgrades: Elevator modernization, HVAC system replacement, security system upgrades
4. Common Area Improvements: Lobby renovations, amenity enhancements, landscaping overhauls
5. Insurance Deductibles: Covering large insurance deductibles after major claims
6. Legal Expenses: Funding litigation or significant legal proceedings
7. Contingency/Reserve Fund Shortfalls: Replenishing inadequate reserve funds

In British Columbia, we have even seen special levies called to cover large insurance premium increases—an unusual situation where a special levy was used to fund an operating expense.

The Approval Process

While the specific approval process varies by province (as detailed in the previous section), most follow this general sequence:

1. Identification of Need: The board/council identifies a major expense that cannot be covered by the operating budget or reserve fund
2. Professional Assessment: Engineers, contractors, or consultants provide reports and cost estimates
3. Resolution Development: The board/council prepares a resolution detailing the levy purpose, amount, and payment terms
4. Owner Meeting: A meeting is called where the issue is presented and discussed
5. Vote: Owners vote according to provincial requirements (e.g., ¾ vote in BC)
6. Implementation: If approved, notice is sent to all owners with payment instructions
7. Collection: Funds are collected according to the specified timeline
8. Project Execution: The specific project is completed using the collected funds
9. Reporting: The board must account for how the funds were spent
10. Surplus Distribution: Any excess funds are typically returned to owners or transferred to the reserve fund

Special Levies Across Canada: Provincial Differences

While special levies (or special assessments) exist in all Canadian provinces, the specific laws, approval requirements, and implementation processes vary significantly. Here’s how special levy regulations compare across Canada’s most populous provinces.
Key Provincial Differences

Special Levies vs. Maintenance Fees: Understanding the Difference

Many condo buyers and owners confuse regular maintenance fees with special levies. Understanding the distinction is crucial for financial planning.

Regular Maintenance/Strata Fees

• Purpose: Cover day-to-day operations, regular maintenance, and contributions to the contingency reserve fund
• Frequency: Monthly, or occasionally quarterly, ongoing
• Predictability: Generally predictable with moderate annual increases
• Approval: Set through the annual budget process
• Planning: Part of your regular monthly housing budget

Special Levies/Assessments

• Purpose: Fund specific projects, major repairs, or unexpected expenses
• Frequency: Irregular and often unexpected
• Predictability: Difficult to predict timing and amount without proper documentation
• Approval: Require special voting procedures at general meetings (varies by province)
• Planning: Require separate emergency savings or financing beyond monthly budget

How Maintenance Fees Affect Special Levy Risk

There’s an important relationship between regular fees and special levy frequency:

Ontario’s Approach: Higher Regular Fees, Fewer Special Levies

Ontario condos typically charge significantly higher monthly fees with larger contributions to reserve funds. According to our data, Ontario condo reserve fund contributions average over $200/month per unit—nearly double Alberta’s and almost triple BC’s contribution rates. This approach:

• Reduces the frequency of special levies
• Provides more stable financial planning for owners
• Distributes costs more evenly between current and future owners
• Requires mandatory reserve fund studies every three years

BC’s Approach: Lower Regular Fees, More Special Levies

British Columbia strata corporations often maintain lower monthly fees with smaller contingency reserve fund contributions (averaging around $70/month per unit). This approach:

• Results in more frequent special levies
• Creates less predictable financial planning for owners
• May unfairly burden those who happen to own during major project years
• Can lead to more contentious approval processes

Prospective buyers should consider both the monthly fees PLUS the likelihood and magnitude of special levies when evaluating the true cost of ownership.

How Special Levies Are Calculated: Understanding Your Share

One of the most confusing aspects of special levies is understanding exactly how much you’ll owe and when. Let’s break this down with concrete examples.

The Unit Entitlement Method

In most provinces, special levies are calculated based on unit entitlement or unit factors:

• British Columbia: Uses “unit entitlement” listed in the strata plan
• Alberta: Uses “unit factors” totaling 10,000 across the complex
• Ontario: Uses “proportionate share” or “percentage interests”
• Quebec: Uses “relative value of fraction”

Despite the different terminology, these all function similarly—they represent your unit’s proportional share of the building’s common expenses.

Calculation Example

Let’s work through a real example:

• Building situation: 50-unit condo building requires a $700,000 roof replacement. Only $200,000 is available in your reserve fund, so $500,000 will be funded by a special levy..
• Your unit details: Your condo has 100 unit entitlement out of the building’s total 5,000 unit entitlement.
• Calculation:
  • Your share: 100 ÷ 5,000 = 0.02 (or 2% of the building)
  • Your special levy amount: $500,000 × 0.02 = $10,000

Fair Division Alternative (BC and Alberta)

In some cases, a special levy might be calculated differently if:

• It primarily benefits specific units
• A unanimous vote (BC) or special resolution (Alberta) approves a fair division method
• The expense logically should be divided differently

Example: A balcony repair issue in a building where only 30% of units have private balconies; non-balcony owners argue they shouldn’t pay. A vote is held and the balcony owners are all highly honorable, and a unanimous vote confirms that only those 30% of unit holders will pay.

Special Levy Costs: What to Expect

Understanding the potential costs of special levies can help buyers and owners prepare financially. While amounts vary widely depending on building size, age, construction quality, and specific needs, our data provides some insights into what Canadian condo owners typically face.

Average Special Levy Costs

Our analysis of thousands of strata corporations across Canada shows these trends:

• British Columbia: Average special levy of nearly $7,500 per unit in 2025, with approximately 130,000 units affected
• Alberta: Average special assessments range from $5,000-$8,000 per unit
• Ontario: Less frequent but often larger levies, averaging $8,000-$12,000 when they occur
• Quebec: Average special assessments of $6,000-$9,000 per unit

Common Special Levy Triggers and Typical Costs

Special Levy Timing in Building Lifecycle

Understanding when special levies typically occur can help buyers assess risk:

• Years 0-7: Rare except for construction deficiency-related issues (often covered by warranty) or insurance event
• Years 8-15: Beginning of component failures, especially in poorly constructed buildings
• Years 15-25: First major systems reach end of useful life (roof, HVAC, elevators)
• Years 25-40: Multiple major components require replacement, highest special levy risk period
• Years 40+: Potential for complete building renewal or redevelopment discussions

These timelines vary based on construction quality, maintenance practices, geographic location, and weather exposure.

Buyer’s Guide: Evaluating Special Levy Risk

For prospective condo buyers, understanding the potential for future special levies is crucial for financial planning. Here’s how to assess special levy risk before purchasing.

Essential Documents to Review

When considering a condo purchase, request and carefully review these key documents:

1. Depreciation Report/Reserve Fund Study
   • Shows anticipated major repairs and replacements over 30 years
   • Indicates whether the reserve fund is adequate
   • Identifies potential future special levies
   • These are standard disclosure in most regions, but in Ontario you by default receive only a notice of future funding and must request the full study.
2. Strata/Condo Meeting Minutes (Last 2-3 Years)
   • Reveal discussions about upcoming major expenses
   • Show voting patterns on financial matters
   • Highlight recurring maintenance issues
   • These are standard disclosure in most regions, but in Ontario you must request it.
3. Financial Statements
   • Indicate the health of the reserve/contingency fund
   • Show spending patterns and fiscal management
   • Reveal any concerning financial trends
4. Form B (BC)/Status Certificate (ON)/Estoppel Certificate (AB)
   • Discloses current or approved upcoming special levies
   • Shows outstanding strata/condo fee payments
   • Lists total contingency/reserve fund balance
5. Property Disclosure Statement
   • Should note any special levies in the last 5 years
   • May indicate known building issues
6. Engineering Reports
   • Detail the condition of major building components
   • Often are prepared on matters of specific near-term importance
   • Identify any concerning issues requiring attention

Questions to Ask Before Buying

It’s important you work with your Realtor to ask specific questions that will help you uncover if there will be a special levy to consider in your future financial plans. These include questions like:

1. Are there any approved or planned special levies?
2. What major repairs or replacements are anticipated in the next 5 years?
3. How much is in the contingency/reserve fund relative to anticipated expenses?
4. What is the building’s history of special levies in the past 5-10 years?
5. Does the strata/condo corporation follow the recommendations in the depreciation report?
6. How do the monthly fees compare to similar buildings, and why?
7. Are there any ongoing or anticipated legal proceedings?
8. Have there been any insurance claims in recent years?
9. What is the building’s maintenance philosophy—proactive or reactive?
10. Does the building have any known construction deficiencies or problematic materials?

Owner’s Guide: Preparing for Special Levies

If you already own, being proactive about potential special levies can help you avoid financial strain when they inevitably occur. There are a couple great ways to do that, including:

Get Involved in Your Condo / HOA Community

Taking an active role in your condo or HOA community can help you anticipate and potentially influence special levy decisions:

1. Attend Meetings: Participate in annual general meetings and special general meetings
2. Review Communications: Carefully read all notices and newsletters
3. Join the Board/Council: Consider volunteering for a position on your strata council or condo board to gain insight and input
4. Ask Questions: Request information about the reserve fund status and upcoming projects
5. Advocate for Planning: Support adequate reserve fund contributions to minimize special levies

Anticipating Future Special Levies

Financial Document Review

Study the Depreciation Report. Take time to thoroughly review your building’s depreciation report, paying special attention to upcoming projected replacements and their estimated costs. This document provides a timeline of when major components are expected to reach the end of their useful life.

Regularly check how your building’s reserve fund balance compares to the projected expenses in the depreciation report. Any significant gaps between available funds and upcoming major expenses can signal a potential special levy on the horizon.

Physical Monitoring

Observe Building Conditions by being attentive to visible signs of deterioration in major building components such as the roof, exterior cladding, windows, elevators, or mechanical systems. Developing issues often precede special levies.

When a Special Levy is Proposed

Initial Steps

First, request detailed information about the project including its comprehensive scope, multiple contractor quotes, and clear timelines. Take time to understand whether the project is truly essential infrastructure maintenance or a discretionary improvement.

Financial Planning

Evaluate the proposed payment schedule carefully and consider all your available payment options. Once the levy is approved, arrange your finances proactively to meet the obligation.

Participation

Attend all information sessions where the levy will be discussed. When voting time comes, make an educated decision based on the information you’ve gathered, recognizing that necessary projects will likely proceed regardless of individual votes.

What Happens If You Can’t Pay a Special Levy

If you’re faced with a special levy you cannot afford, the consequences can be serious. Understanding your options and the potential repercussions is essential.

Consequences of Non-Payment

If you don’t pay a special levy on time, you could face:

1. Interest Charges
   • BC: Up to 10% per annum, compounded annually.
   • Alberta: Up to 18% per annum.
   • Ontario: Rate specified in the condo declaration or bylaws.
   • Quebec: Legal interest rate plus administration fees.
2. Liens Against Your Property
   • The condo corporation can register a lien against your property.
   • This becomes a legal claim against your home’s equity.
   • The lien may appear on your credit report, affecting your credit score.
3. Legal Action
   • The corporation can sue you for the unpaid amount plus legal costs.
   • These costs are typically added to your total debt.
4. Potential Foreclosure
   • In extreme cases, the condo corporation can start foreclosure proceedings.
   • This could force the sale of your property to recover the debt.

How Eli Report Helps

At Eli Report, we understand the financial impact special levies can have on condo owners and buyers. Our platform is specifically designed to help you anticipate and prepare for these significant expenses.

Special Levy Prediction

Our platform analyzes strata/condo documents to identify potential special levy risks:

• Meeting Minutes Analysis: We review meeting minutes to detect discussions about upcoming major expenses
• Depreciation Report Assessment: We evaluate depreciation reports to identify the timing and magnitude of potential underfunding
• Comparative Analysis: We compare your building’s financials to similar properties to help benchmark the level of reserves, the level of contributions, and whether repair and maintenance spending is above or below the cohort

Projected Special Levies Feature

Our Projected Special Levies feature provides:

• Timing Estimates: When special levies are likely to occur based on the engineers’ estimates, the level of reserves and operating reserve contributions
• Magnitude Predictions: Average dollars-per-unit estimates
• Project Identification: The specific capital expenditures likely to trigger levies
• Risk Assessment: Evident from the frequency and magnitude of projected levies

Case Study: Avoiding a Special Levy Surprise

A Realtor and frequent Eli Report user contacted me one Saturday morning. Their client had decided to walk when faced with a time crunch and knowing there were competing offers on a condo unit they liked. But why? Well, our report had indicated substantial upcoming special levies.

As much as I sympathized with the fact that this was a potential commission, their client was happier for having known about this in advance. Perhaps the competing offers will pull back when they learn about the upcoming siding project, perhaps they have factored in the potential levy, or perhaps for the eventual buyer it will be a +$50,000 surprise over the next few years.

All ended well: the client found another condo they liked the very next week and made a successful offer. They knew in advance what the financial health was, and are set for the future!

Final Thoughts

Special levies are seemingly an inevitable part of condo ownership across Canada. While they can represent significant financial obligations, being informed and prepared can help you navigate them successfully.

Whether you’re a current owner or prospective buyer, understanding the special levy landscape in your province, watching for warning signs, and maintaining adequate financial reserves will help you avoid surprises and make sound real estate decisions.

Sign up for your free Eli Report to get a personalized analysis of potential special levies for your current or prospective condo.