What’s a Reasonable Condo Fee Increase in Ontario?
Practical Guidance for Smarter Condominium Governance in the Sarnia and London Areas
If you are an owner staring at a notice that your fees are going up, or a board member trying to set next year's budget, you are probably asking the same thing: how much can condo fees actually increase in Ontario, and is there a limit? The short answer surprises most people. Unlike residential rent, Ontario sets no legal cap on condo fee increases, so the real question is not "what is allowed" but "what is reasonable and financially responsible." This guide breaks down how much fees typically rise, what the Condominium Act, 1998 requires, and how boards can justify an increase clearly to owners.
At Sapphire Condominium Management, we work with condo boards across Sarnia, London, and Southwestern Ontario, managing millions in annual condominium budgets. One of the most sensitive discussions every year is the annual condo fee increase, and how to justify it clearly to owners.
How Much Can Condo Fees Increase in Ontario?
Here is the answer most owners are searching for. In Ontario, condo fees can increase by whatever amount is needed to fund the corporation's approved annual budget and its required reserve fund contributions. There is no percentage ceiling written into the law.
In practice, though, most well-maintained buildings in normal economic conditions land in a predictable range. Property managers and industry associations generally report annual increases of about 3 to 6 percent, with the Consumer Price Index (typically 2 to 4 percent) treated as the minimum baseline that simply keeps pace with rising costs. Increases climb above that range when insurance premiums spike, when a reserve fund study calls for higher contributions, or when a board is catching up after holding fees flat for too long.
So the honest framing is this: your fees can increase by a lot if the budget genuinely requires it, but a reasonable increase is one that is driven by real, documented cost drivers and communicated clearly, not one pulled out of the air. The rest of this guide explains where those drivers come from and how to tell a responsible increase from an avoidable one.
Is There a Legal Limit on Condo Fee Increases in Ontario?
No. Unlike residential rent, there is no provincially mandated cap on condo fee increases. Fees can increase by whatever amount is necessary to fund the approved budget and required reserve contributions. This is exactly why the search for a "condo fee increase limit in Ontario" comes up empty, and why proactive reserve management and transparent communication matter so much. The law provides no safety net against large increases caused by poor planning, so the discipline has to come from the board and its manager, not from a statutory ceiling.
The Honest Answer: It Depends on Your Building
Before we get deeper into numbers, let's acknowledge something important: "reasonable" is relative. A 3% increase for a new building in excellent condition with a fully funded reserve is very different from a 3% increase for a 30-year-old building that has been underfunding its reserve for a decade. Context matters.
That said, here are the reference points that most Ontario boards use when planning annual fee adjustments:
Consumer Price Index (CPI) inflation: A fee increase that tracks CPI (typically 2-4% in normal economic conditions) is generally seen as the minimum baseline, it simply keeps pace with the rising cost of goods and services.
Reserve fund study recommendations: If the reserve fund study calls for higher contributions, that is a non-negotiable driver. The Act requires it.
Operating cost increases: Rising insurance premiums, utility rates, and contractor costs may push operating budget increases above CPI in a given year.
Deferred increases: If fees have been held flat for several years, a catch-up increase may be necessary, and it will be larger than if increases had been applied consistently.
The Risk of Keeping Fees Too Low
One of the most common mistakes in condominium governance is holding fees artificially low to avoid conflict. It feels like the right thing to do, owners are happy in the short term, and board members don't have to face uncomfortable questions. But it almost always backfires.
When fees are held below what's actually needed, one or more of the following happens:
The reserve fund becomes underfunded. This doesn't show up immediately, but when a major capital project hits, roof replacement, elevator overhaul, parking structure repairs, the money isn't there. The result is a special assessment, sometimes in the thousands of dollars per unit.
Operating shortfalls accumulate. Minor deferral of routine maintenance turns into major repair costs. A $5,000 waterproofing job deferred for three years becomes a $40,000 water damage remediation project.
Future boards are forced into larger, more disruptive increases. An ownership community that accepted 0% for five years is not emotionally prepared for a 15% catch-up increase, even if it's the right number.
The most financially responsible boards in Ontario are the ones that apply steady, consistent, modest increases every year rather than holding fees flat and then asking for a large catch-up.
Industry Benchmarks: What Ontario Boards Are Actually Doing
While there is no official database of condo fee increases in Ontario, property managers and industry associations generally report that annual fee increases in the range of 3-6% are typical for well-maintained buildings during normal inflationary periods.
In 2022-2024, many buildings saw higher increases, in the 6-12% range, driven primarily by:
Dramatically increased insurance premiums (in some cases 20-40% year over year)
Natural gas and hydro rate increases
Significant increases in contractor and trade labour costs
Reserve fund study updates reflecting higher construction cost escalation factors
A fee increase in the 8-10% range during this period was not mismanagement, it was responsible financial stewardship. The challenge was, and remains, communicating that clearly to owners who may feel the increase is excessive.
What the Ontario Condominium Act Requires
The Act doesn't set a maximum for fee increases, but it does create obligations that drive them. Specifically:
Boards must fund the reserve at the level recommended by the reserve fund study, or at 10% of operating expenses, whichever is greater.
The annual budget (and therefore fees) must be set and distributed to owners at least 15 days before the start of the fiscal year.
Boards must conduct a reserve fund study every three years (with an update in the off years) and cannot simply ignore the findings.
This means that if your reserve fund study recommends increasing annual contributions by $150 per unit per month, the board is legally required to do it. Explaining that to owners, framing it as legal obligation and sound financial stewardship rather than a discretionary choice, is one of the most important jobs of good communication. If you want the full picture of how the underlying number is built in the first place, our companion guide, How Condo Fees Are Calculated: A Guide for Board Members in Sarnia and London, walks through it step by step, and How Much Should Your Condo Board Contribute to the Reserve Fund? covers the reserve side in detail.
How to Communicate a Fee Increase Effectively
The way a fee increase is communicated matters almost as much as the number itself. Owners who understand why fees are going up, and can see the specific drivers, are far more likely to accept the change than owners who receive a form letter with a new number and no explanation.
Best practices for communicating fee increases:
Send a budget summary letter to all owners at least 30 days before the new year (not just the minimum 15 days required by law)
Break down the increase by category: "3% for operating cost increases, 2% for reserve fund contributions" is much more convincing than just "5% increase"
Reference the reserve fund study by name and date, remind owners that this is a professionally prepared, legally required document
Use plain language, not accounting terminology
Hold a pre-budget town hall or Q&A session to give owners a chance to ask questions before the increase takes effect
Make the full budget available to any owner who requests it under the Act
At Sapphire, we work with boards to create budget letters and owner summaries that explain increases clearly and head off the most common objections before they become AGM confrontations. For a deeper walkthrough of the messaging itself, see How to Justify a Condo Fee Increase?
If your board finds itself dreading budget season every year, guessing at the increase and then scrambling to defend it after the notices go out, that is usually a sign the corporation has outgrown do-it-yourself administration. Good professional condo management means the increase is modeled against the reserve fund study before it is proposed, justified line by line, and communicated to owners well before the AGM, so a necessary increase lands as sound stewardship rather than a confrontation. That is the difference a responsive manager makes in the one meeting a year that owners actually show up to.
When Is a Fee Increase NOT Enough?
Sometimes a fee increase isn't sufficient, a special assessment is also needed. This is typically the case when:
A major unexpected repair arises (foundation crack, flood damage, fire remediation) that exceeds reserve fund capacity
A building has chronically underfunded its reserve and needs to catch up quickly
A capital project is identified that wasn't included in the most recent reserve fund study
Special assessments are a last resort, and boards should work hard to avoid them through consistent reserve fund contributions. But when they're necessary, they should be communicated as transparently as possible: what the project is, why reserve funds are insufficient, how the assessment was calculated, and what the payment options are. And when the shortfall is being driven by owners who have simply stopped paying, our guide What Happens if Owners Stop Paying? explains the recovery tools available to the corporation.
Who Provides Condo Management in London and Sarnia, Ontario?
Sapphire Condominium Management serves condo boards across London and Sarnia, Ontario, and budget season is exactly where local, professional management earns its keep. Setting a fee increase that is high enough to fund the reserve, low enough to keep owners onside, and defensible enough to survive the AGM is a genuine skill, and it is one boards should not have to improvise alone. If your board is weighing whether to move from self-management to a professional partner, or to switch managers after a budget that did not go well, Sapphire brings the reserve fund planning, budget modeling, and clear owner communication that keep an annual increase from turning into a dispute.
Frequently Asked Questions
Q: Is there a legal maximum on how much condo fees can increase in Ontario?
A: No. Unlike residential rent, there is no provincially mandated cap on condo fee increases. Fees can increase by whatever amount is necessary to fund the approved budget and required reserve contributions. This is why proactive reserve management and transparent communication are so important, the law provides no safety net against large increases caused by poor planning.
Q: How much do condo fees usually increase each year in Ontario?
A: For a well-maintained building in normal economic conditions, an annual increase in the range of 3 to 6 percent is typical, with CPI inflation (roughly 2 to 4 percent) treated as the minimum baseline. Increases run higher when insurance premiums jump, when a reserve fund study calls for larger contributions, or when a board is catching up after years of flat fees. There is no single correct number, the right figure is the one your budget and reserve fund study actually require.
Q: What can I do if I think my condo fee increase is unreasonable?
A: You have several options as a unit owner. First, request the full annual budget and reserve fund study from the board, you have a legal right to these documents. Second, review them for errors or apparent overspending. Third, raise your concerns formally at the AGM or through a written request to the board. If you believe the board is not meeting its obligations, you can contact the Condominium Authority of Ontario (CAO) or seek professional advice.
Q: Should we increase fees a little every year or hold them flat and do a bigger increase less often?
A: Small annual increases are strongly preferable. Consistent modest increases are more sustainable, easier for owners to budget for, and less likely to create reserve fund shortfalls than periodic large catch-up increases. Many experienced property managers recommend budgeting for at least a 3% annual increase as a baseline, adjusting upward based on actual cost drivers and reserve fund requirements.
Q: How do we handle an increase driven entirely by insurance, can we explain that to owners?
A: Absolutely, and you should. Insurance premium increases are a documented, third-party cost that boards have limited control over. Share your insurance renewal invoice with owners (redacting any sensitive details if needed) and explain that the increase is being passed through at cost. Most owners will accept a factually supported insurance-driven increase much more readily than a vague "general cost increase."
Q: Who provides condo management in London or Sarnia, Ontario?
A: Sapphire Condominium Management serves condo corporations and boards throughout London and Sarnia, Ontario. We help boards build defensible annual budgets, plan reserve fund contributions, and communicate fee increases to owners clearly, so that when fees rise, the reasoning is transparent and the AGM stays civil. If your board is considering professional management or a change of manager, you can reach us through the links on this page.
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