Fees, Budgets & Reserve Funds
How to Read Your Condo's Financial Statements
You don't need an accounting background to check the handful of numbers that actually matter.
Ontario condo corporations prepare annual financial statements, often audited depending on the corporation's size and bylaws. The statements typically separate the operating fund, day-to-day expenses, from the reserve fund, long-term savings, and that distinction matters more than most of the other numbers on the page.
Owners are generally entitled to request copies of financial statements as corporation records. Reading a handful of figures carefully tells you more than skimming the whole document.
What to check first
- 1Find the operating fund and reserve fund balances listed separately.
- 2Compare actual spending to budgeted spending for major categories.
- 3Look for a note on any deficit or surplus and how the board plans to address it.
- 4Check accounts receivable to gauge how many owners are behind on fees.
- 5Read the notes for explanations of any unusual or one-time expenses.
- 6Compare year-over-year trends rather than looking at a single year in isolation.
- 7Note the auditor's opinion, if the statements are audited, for any qualifications.
Common mistakes owners make
- Looking only at the bottom-line total and nothing else.
- Not separating operating fund figures from reserve fund figures.
- Skipping the notes to the financial statements, where most explanations live.
- Assuming a surplus automatically means fees will drop.
- Reviewing only one year instead of comparing several for a trend.
Documents to gather
- Current year financial statements
- The prior two years' statements for comparison
- The AGM budget package
- The reserve fund study
- The auditor's report, if applicable
- An accounts receivable or arrears summary
When to get a closer look
- Numbers don't reconcile between different documents.
- A deficit or shortfall isn't clearly explained.
- You're buying and need help interpreting the statements against the reserve fund study.
- Unusual or unexplained expenses appear in the notes.
Keep learning
This is one piece of a bigger picture. See how it connects across the rest of the library.
Related reading
Frequently asked questions
Are condo financial statements audited?
Many are, depending on the corporation's size and bylaws, though requirements and practices vary. Check whether your corporation's statements carry an auditor's opinion.
What's the most important number to check?
There isn't just one. The operating fund balance, the reserve fund balance versus the reserve fund study's recommendation, and accounts receivable together give the clearest picture.
Can I request past years' statements?
Owners generally have a right to request corporation records, including past financial statements, subject to the Act's record-request process.
What does a high accounts receivable balance mean?
It often signals that a meaningful number of owners are behind on fees, which can affect the corporation's cash flow and, in some cases, its ability to fund planned projects.
Why do the numbers in the AGM budget and the financial statements look different?
The budget is a forecast prepared in advance. The financial statements report what actually happened. Comparing the two is exactly how you spot a trend worth asking about.
Ready to understand your own situation?
Pick whichever way of reaching us feels natural. Starting is free, and the decision stays yours.
This page is plain-language educational information for Ontario condo owners. It is not legal advice, not an engineering inspection or opinion, and not a substitute for advice about your specific situation from a licensed professional. Condo Owner Advocate helps you understand your situation. You decide what to do.