The annual audited financial report that details the condominium corporation's income, expenses, reserve fund balance, and overall financial health. The financial statement is prepared by an independent auditor and presented to owners at the Annual General Meeting. It includes the operating fund (day-to-day expenses), reserve fund (long-term capital repairs), and any outstanding liabilities or legal proceedings. It is included in the status certificate.
Why It Matters
The condo financial statement is one of the most important documents to review before buying a condo. It reveals whether the corporation is running a surplus or deficit, whether the reserve fund is adequately funded, and whether there are any pending lawsuits or special assessments. A condo with a weak financial position is a condo that's heading toward fee increases or special assessments.
Real-World Example
You are reviewing the status certificate for a 15-year-old building near Bayview and Sheppard. The audited financial statement shows the operating fund ran a small surplus last year, the reserve fund has $3.2 million against a recommended balance of $3.5 million, and there are no outstanding lawsuits. The auditor's notes flag one concern: building insurance premiums jumped 35% year-over-year, putting pressure on the next year's budget. Based on this analysis, your lawyer advises that the building is in solid financial health but that a modest maintenance fee increase is likely in the coming year to absorb the insurance cost.
Ontario & GTA Context
The Ontario Condominium Act, 1998 requires every condo corporation to prepare audited annual financial statements and present them at the Annual General Meeting. The audit must be conducted by an independent licensed public accountant. The financial statements are also included in every status certificate provided to prospective buyers. Ontario regulations require the financial statements to include both the operating fund and the reserve fund, along with notes on any material liabilities, contingencies, or pending litigation.
How It Works in Practice
When reviewing a condo financial statement, focus on the operating fund balance (is it in surplus or deficit?), the reserve fund adequacy (how does it compare to the reserve fund study recommendation?), insurance costs (are they rising sharply?), and any notes about pending litigation or contingencies. Your real estate lawyer should flag any concerns during the status certificate review.
Common Questions
Are condo financial statements publicly available in Ontario?▾
What should I look for in a condo financial statement?▾
Related Guides
Related Tools
Need Guidance?
Get a second opinion on your real estate situation. No pressure, no obligation.
The RAZZ Report
Market insights and practical advice delivered to your inbox.