Why I Always Add This Clause to Condo Deals

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Back when I was working as a broker, one of my first condo deals in Toronto taught me a lesson in special assessments.

The deal was firm by September 2nd, set to close on October 18th.

We reviewed the status certificate — all clear.

Closing went smoothly, keys were exchanged, and my client moved in.

Two days later, they checked the mailbox.

Inside was a letter from the condo board, dated October 1st — two and a half weeks before closing.

It announced a $2,500 special assessment for increased Covid-related operating costs, payable in two installments later that fall.

It wasn’t disclosed in the status certificate.
The Agreement didn’t assign responsibility.
And my client was now the registered owner.

Legally, they were stuck paying it — with their best hope to try and recover against the seller after the fact.

So I wrote a few letters, made some arguments and eventually, both sides agreed to split the cost 50/50 to avoid dragging it out.

That was a best-case outcome.

But even then, my client was left with an unexpected bill — and unnecessary stress.

And that deal changed how I handle these situations.

If a special assessment gets announced in that window, and you haven’t addressed it in the APS, the buyer may be stuck paying — and chasing.

The standard form offers no protection.

And when that happens, the issue would likely turn on fact-specific arguments:

• whether the expense is for past or future work,
• who receives the benefit,
• and whether the seller knew or not.

It’s messy, and it usually happens at the worst possible time.

So how do you avoid it?

Like most foreseeable problems, we need to draft for it.

Add a clause before it becomes a problem.

Here’s language I now recommend — and prefer to see when representing condo buyers:

The Seller agrees to notify the Buyer in writing of any notice from the Condominium Corporation related to any actual or contemplated:

a) increase in common expenses;
b) special assessments;
c) additional charges or levies against the Property; and
d) updated plan for future funding of the reserve fund

delivered to the Seller at any time prior to the Completion Date.

The Seller agrees to be responsible for any special assessment, or other charges relating to the Property that are not disclosed in the Status Certificate obtained by the Buyer that may be announced or disclosed by the Condominium Corporation prior to the Completion Date. This amount, if any, shall be adjusted, in favour of the Buyer, on closing.

It’s clean. And it brings certainty to an otherwise unpredictable situation.

If you’re working on a condo deal, this clause belongs in your Schedule A.