What Every Board, Manager, and Owner in Ontario Needs to Understand Right Now
If you have ever been on a condo board when a chargeback dispute lands on the table, you know how quickly a straightforward situation can become complicated. If you manage properties, you know the stakes of getting the process wrong. And if you are a unit owner who has received a chargeback notice and wondered whether it was legitimate, you are not alone.
Chargebacks are one of the most frequently misunderstood areas of condominium governance in Ontario. They are also one of the areas where the legal landscape shifted significantly at the end of 2025, with consequences that boards, managers, and owners need to understand.
We want to walk through what chargebacks actually are, what the law permits, what changed, and what it means in practice.
What Is a Chargeback, Really?
One of the most common misconceptions boards encounter is that a chargeback is a way to penalize an owner who is not following the rules. It is not. A chargeback is a cost recovery tool with a very specific purpose: to ensure that when the corporation incurs a cost because of one unit, that unit pays for it rather than every owner in the community absorbing it through shared common expenses.
The Condominium Act, 1998 is explicit that a chargeback must represent an actual cost incurred by the corporation and must be authorized by the Act or the corporation’s governing documents. It cannot be arbitrary. It cannot be punitive. And it cannot be issued simply because a situation is frustrating. When your management provider issues a chargeback on behalf of your corporation, there needs to be documented evidence, a clear legislative or governing document authority, and a proper process behind it.
This matters not just for fairness to the owner receiving the charge, but for the protection of your corporation. An improperly issued chargeback can be challenged, and the costs of defending one that should not have been issued can far exceed the original charge.
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What the Act Permits
The Condominium Act identifies five specific circumstances under which your corporation can charge a cost back to a unit owner. These have not changed and remain the legal foundation for all chargeback activity in Ontario.
Outside of these five categories, no chargeback is valid under the Act alone. Your corporation’s Declaration may extend that authority through an indemnification provision, but this is where things get more nuanced and where the wording of your specific Declaration becomes critical.
Why Your Declaration Wording Matters More Than You Think
This is the part we really want to make sure boards understand, because it has a direct impact on how chargebacks are managed going forward.
For ten years, the condominium industry in Ontario had been waiting for amendments to the Act that would have standardized and simplified the chargeback process. These amendments were introduced under the Protecting Condominium Owners Act, 2015 but were never proclaimed into force. ACMO and CCI both advocated strongly for their proclamation, recognizing that the current framework leaves too much inconsistency and too little clarity for all parties involved.
On December 11, 2025, Bill 72 (the Buy Ontario Act, 2025) received Royal Assent and extended certain unproclaimed amendments for a further year. The chargeback-related amendments were not among them. They expired at the end of 2025 and are now gone unless the government introduces entirely new legislation. What the industry lost includes:
A standardized mandatory notice process with a prescribed form and timeline for notifying owners of a chargeback and giving them a meaningful opportunity to respond.
Expanded CAT jurisdiction over chargeback disputes which would have allowed owners to challenge chargebacks at the Condominium Authority Tribunal rather than through the courts or costly private arbitration.
Additional prescribed chargeback scenarios providing legislative clarity on what costs corporations are permitted to recover beyond the five existing Act categories.
Mandatory communication timelines that would have created consistent, transparent expectations between corporations and owners around how chargebacks are communicated and disputed.
What this means for your board is straightforward: there is no legislated process to point to, no prescribed notice form, and no simplified dispute pathway for most chargeback scenarios. The quality of your management provider’s internal processes is now the primary safeguard your corporation has.
How CIE Approaches This
We have always believed that a chargeback should never arrive as a surprise to an owner. By the time a chargeback letter goes out, the owner should already know what happened, why the corporation incurred a cost, what authority supports the charge, and what their options are. That standard has not changed for us regardless of what the legislation does or does not require.
CIE administers chargebacks through a structured five step process: incident investigation with documented facts establishing responsibility, advance written notice to the owner referencing the relevant legislative or governing document authority, invoice processing and review, final chargeback issuance with a clear due date, and ongoing tracking and reporting to the board. No chargeback proceeds without a documented basis. Lien timelines are actively managed well in advance of the three month deadline, and all lien activity is approved through Operations Management and handled exclusively through legal counsel.
CIE will continue to monitor legislative developments and update our approach as the framework evolves.
Connect with CIE Property Management to learn more about how we support boards, protect corporations, and manage complex governance matters with clarity and consistency.
