I’ve had a long relationship with Market Square. Years ago, I owned a spectacular penthouse there — which I sold privately after pairing it with the unit next door to create a dream layout for my buyer. These days, I still own an income-producing suite in the building, and while I may not sit on the board, I remain an attentive and informed unit owner.
So when a recent newsletter from the building crossed my inbox — explaining, with unusual clarity, what our maintenance fees support — I felt compelled to pass along the insights, in my own words, for anyone curious about how these numbers actually work.
How Do Condo Reserve Funds Work?
Let’s start with the basics: every month, roughly $50,000 from the residents of 35 Church Street and $86,000 from those at 80 Front Street East is tucked away into reserve fund accounts. These are entirely separate from the day-to-day operating budget — and for good reason. The Condominium Act of Ontario requires all condo corporations to maintain these reserve funds exclusively for major repairs and replacement of common elements as they existed when the building was originally constructed.
So no, the reserve fund can’t be used to build a glamorous rooftop pool, add EV charging stations, or convert an unused utility room into a champagne lounge (tempting as that may be). However, it can be used to meet newer building codes when replacing existing systems, so long as those upgrades fall under repair or replacement.
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How is the Reserve Fund in a Condo Determined?
Here’s where it gets more nuanced — and more important.
The Act also requires that these funds be adequate. In other words, the corporation must plan far enough ahead to cover future big-ticket expenses: replacing the HVAC, re-roofing, repairing elevators, overhauling mechanical systems, and more. These aren’t guesstimates made over wine at the AGM. Instead, the Board hires specialized engineering consultants to conduct Reserve Fund Studies — thorough, multi-part analyses that examine both the physical state of the building and the long-term financial implications.
And this isn’t a one-time thing. Best practice — and common policy — is to refresh these studies every three years. The engineering team inspects the building’s systems, components, and structure, assessing nearly everything: the water supply, fire alarms, security systems, amenities, parking garages, window systems, and more — 208 categories, to be exact, each with multiple subcomponents. From this physical analysis, a financial forecast is built, estimating what will need replacing, when, and at what cost — adjusted for inflation, interest, and other market variables.
Are newer Toronto condo buildings really better than older buildings? Find out why I actually love older condos better with this post right here.
What’s Unique About Market Square’s Reserve Fund?
And here’s the kicker: because Market Square is technically two separate condo corporations (35 Church and 80 Front), each building maintains its own reserve fund. But thanks to shared infrastructure — think roof gardens, owner parking level, amenities — coordination between both boards is essential. Add to that a third stakeholder, H&R REIT, which manages the public parking garage and retail tenants like Metro, HotHouse Cafe, and TD Bank. A tripartite “Reciprocal Agreement” outlines who pays for what when repairs affect all three entities.
Still awake? Good. Because while this may sound like dull admin, it’s actually a fascinating orchestration of real estate pragmatism. Understanding the way your maintenance fees are allocated — and protected — offers peace of mind that the place you call home won’t spring expensive surprises without a plan.
Are you curious about condo buildings in Toronto? Check out my Condo Chronicles series, where I rework some of Toronto’s most iconic condo floor plans. Here are a few of the latest Condo Chronicles you might like:
- Reworking the Residences of 488 University Avenue
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And for the day-to-day resident? You may never think twice about the concierge who safely holds your packages, the water pressure in your shower, or the climate-controlled gym you work out in. But all of that exists because a whole lot of people — and yes, your monthly contributions — are keeping the gears turning quietly behind the scenes.
So the next time you wince at your maintenance fees, remember: they’re not just funding the present. They’re safeguarding your future investment — one spreadsheet and building inspection at a time.
Do you have questions about architecture or real estate? I’m always happy to help! Get in touch today by calling 416-824-1242, emailing robert@lifeofluxury.ca, or filling out the form on this page.
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