Increasing condo fees is often a sensitive issue in co-ownerships, especially in small, self-managed co-ownerships where each co-owner is often involved in the financial management of the building.

How can realistic fees be set without causing tension? How can we ensure that the co-ownership remains in good financial health by avoiding sudden increases?

Here is a clear guide to managing this situation calmly and effectively..

Summary of Law 16 for small condominiums

Since the latest updates concerning the entry into force of Law 16, condominiums in Quebec are more sensitive to obligations than they were before September 11, 2024. Why? To promote more rigorous financial management.

The law will impose, in particular:

A maintenance logbook detailing planned and completed work.
A study of the reserve fund every 5 years to ensure that financial reserves are sufficient.
A certificate for greater transparency on the status of the syndicate during transactions.

Condominiums must therefore adjust their condo fees to remain compliant with the new requirements and avoid special assessments.

Condo fees: why?

Condo fees are used to cover the current expenses of a condominium and to anticipate the costs of major works.

In particular:

The operating fund: electricity for common areas, maintenance, insurance, etc.
The reserve fund: major works such as replacing the roof, windows, facades, etc.
The self-insurance fund: the amount needed to pay the insurance excess.

In a small condominium, these costs must be calculated as carefully as in large condominiums. Fewer co-owners means fewer resources to share the costs. Poor planning can therefore jeopardize the value of the units and cause conflicts.

Condo fees too low: what are the risks?

Some condominiums choose to keep condo fees artificially low to preserve the budget of the co-owners. But in the long run, this leads to significant problems.

Lack of funds for maintenance: Urgent repairs (e.g. leaking roof, cracks in the foundations, etc.) must be paid for urgently. This problem often leads to an unforeseen special contribution.
Deterioration of the building and loss of value of the units: A poorly maintained building loses value. Potential buyers are wary if they see an underfunded co-ownership.
Conflicts between co-owners: A significant and sudden increase in condo fees after years of stagnation can create tension. Especially if some co-owners are having trouble paying.

In short, it is best to have a good balance between reasonable fees and prudent management to avoid these situations.

Who decides on the increase in condo fees?

The increase in condo fees is decided at a general meeting by the co-owners. The declaration of co-ownership defines the rules of financial management, but any increase must be voted on collectively.

Good practices to avoid conflicts:

✅ Present a detailed budget to demonstrate why an increase is necessary.

✅ Consult the co-owners in advance to minimize negative reactions.

✅ Apply gradual increases rather than a sudden increase.

How can we avoid disputes over fee increases?

Tensions over increased fees are common. Here are three best practices for a smooth transition.

1. Ensure full financial transparency

Present an annual expenditure report and make it accessible to all.
Set up a shared online file containing the building's finances.

2. Consult co-owners before making a decision

Canvass the opinion of co-owners before the general meeting.
Explain the increase by presenting concrete figures to avoid reactions of mistrust.

3. Apply a gradual increase

Make up the contributions over a period of 10 years as permitted by law to avoid an abrupt increase.
Compare the condominium fees with other comparable buildings to justify the increase.

Common errors in calculating condo fees

Errors in calculating fees can cause deficits and conflicts. Here are the most common ones:

Underestimating the actual costs: Forgetting inflation or the increase in service rates (insurance, electricity, etc.). Not planning for or underestimating major long-term repairs.
Not contributing enough to the contingency fund: Law 16 requires a reserve fund to avoid financial unforeseen events.
Incorrect distribution of charges between co-owners: Sometimes, some pay more than their actual share due to an incorrect calculation.

Tip

Check the distribution of costs every year and adjust contributions according to the needs of the condominium.

How can you deal with non-payment of condo fees?

Some co-owners may fall behind in paying their fees, which weakens the entire condominium.

Here are the steps you could take:

Give a formal notice, i.e. a first written reminder must be sent as soon as the first delay occurs.
Impose penalties and interest on late payments to avoid abuse, some condominiums apply late fees.
Put a unit up for sale through the courts in case of prolonged non-payment. As a last resort, legal action can be taken against a co-owner who refuses to pay.

That said, you should maintain a reserve fund to compensate for these delays. Normally, a well-managed condominium has a safety margin to cover these unforeseen events. Strict but fair management avoids financial imbalances.

Sources:

Conclusion

Increases in condo fees are inevitable in any condominium. However, they must be well planned and well explained to avoid tension.

✅ Transparency, consultation and realistic forecasts are the keys to sound management.

✅ A well-structured contingency fund avoids surprise contributions.

✅ A gradual increase in fees is often better accepted than a sudden increase in contributions.

Need help adjusting your condo fees? Consult Borée, an expert in co-ownership, to help you have good financial planning and good relations with your co-owners.

How can the increase in condo fees in a small condominium be managed?