Short answer
The reserve-fund balance alone cannot tell you whether a condominium is financially healthy. Read it beside the reserve-fund study, funding plan, building age, planned repairs and recent budgets. A large fund can still be inadequate for major work, while a smaller fund may be reasonable for a newer corporation with a sound plan.
The buyer’s real concern
A condominium purchase includes the unit and a financial relationship with the corporation. The client needs to know whether the documents, monthly cost, future repairs, rules and lender acceptance support the way they intend to live, rent or eventually sell.
A practical Ontario example
Illustration only: A buyer sees $2 million in the reserve fund and assumes the building is safe. The study projects $5 million of garage and building-envelope work within three years. The lawyer flags the funding assumptions, while the buyer asks how the board plans to cover the difference before waiving the status condition.
What to review now
Compare the latest study with the notice of future funding, current balance, annual contributions, recent financial statements and board information. Look for large projects, deferred work, optimistic cost assumptions and sharp planned contribution increases.
Do not review the unit in isolation
The unit may look excellent while the corporation faces expensive repairs, litigation, insurance problems or a funding shortfall. The reverse is also possible: a well-run corporation can still have a unit-specific problem. Review both levels before removing conditions.
Questions Rajiv would ask
- Is this a resale or newly registered condominium?
- Will you occupy it, rent it or use it part-time?
- What do current fees include, and can your budget absorb an increase?
- Has the lawyer reviewed the current status package?
- Has the intended lender accepted the condominium?
- Which document or deadline remains unresolved?
Practical options
- Ask the lawyer to explain the documents and missing information.
- Ask the Realtor to compare the building with nearby alternatives.
- Budget for rising fees even when no special assessment is announced.
- Do not treat one reserve-fund number as a pass-or-fail test.
How financing fits
A strong borrower can still face a property decline. A lenders, insurers and alternative lenders review condominium risks differently, including litigation, insurance, marketability, commercial concentration and building condition. A MIC or private lender may consider a short-term solution when equity and exit are strong, but it should not be used to hide a property problem the buyer has not understood.
Who should answer each question?
- Condo lawyer: status certificate, title, documents, assessment and legal exposure.
- Realtor: comparable sales, building history, negotiation and offer protection.
- Inspector: observable unit condition and accessible systems.
- Insurance professional: unit-owner coverage and deductible exposure.
- Mortgage broker: lender acceptance, qualification, payment and backup routes.
Facts, lender policy and assumptions
Verified public guidance: CAO explains that reserve funds pay for major repairs and replacements of common elements and that reserve-fund studies estimate future costs. An estimate is not a guarantee that actual work will match the forecast.
Lender policy: property acceptance and mortgage treatment vary by lender. Legal advice: the buyer’s lawyer interprets the documents and agreement. Assumption: past fees, repairs and resale performance do not guarantee future results.
Pressure-test the purchase
Model a higher condo fee, a special assessment, an insurance increase, delayed repair and a slower resale. If one ordinary condo expense makes the household budget unworkable, reduce the price range or choose a building with a more comfortable cost profile.
Documents to gather
- Current status certificate and attachments
- Declaration, bylaws and rules
- Budget, financial statements and reserve-fund study
- Insurance certificate and standard-unit definition
- Assessment, litigation or major-project notices
- Agreement, listing and parking or locker details
Related AskRajiv guidance
Continue with condo status certificate condition offer, condo special assessment payment closing resale.
Discuss the condo before the financing deadline
Use Rajiv’s direct mortgage strategy contact form. Include the building, unit, price, deadline and document concern so the lender review starts with the property issue.
Need a condo professional?
Use Rajiv’s Professional Referral Concierge for a relevant introduction based on the location, property and deadline.
Source and review
Read the primary source. Source checked 2026-09-03. Reviewed by Rajiv Verma, Mortgage Broker on 2026-09-03. Educational information only; not legal, insurance, appraisal, real-estate or mortgage approval advice.