Monthly condo fees are paid above and beyond your purchase price, and are unique to the condo buying market. Simply put, condo fees cover the services and utilities of the condo building on a macro level, not just your unit. The amount can vary between condo corporations, as there is no standard rate in the Canadian condo industry. But generally, maintenance fees are calculated per square foot of the condo space, so the monthly costs depend on the size of the unit. Costs can also vary based on what utilities and amenities are available to residents. For example, a condo that only has a weight room should have lower maintenance fees than a condo that includes a gym, swimming pool, sauna, barbecue area, screening room, party room and meeting rooms. These amenities all require maintenance and staff to run them.
Most developments’ condo fees also cover utilities such as water and waste services. Some buildings even include heat, electricity, cable and Wi-Fi. A few other things that are covered that you may not have considered are the exterior building maintenance, landscaping, snow removal, and all common elements shared by residents.
What do monthly condo fees cover? Here’s a breakdown of common ways your maintenance fees are invested:
So when you decide to jump into the condo market, one of the first things you should ask your realtor about are monthly condo fees. While condos fees can fluctuate wildly from building to building, looking at other buildings by the same developer can show you if fees have increased. They do this because of differences in amenities, location, and management, age of the development and size of units. These are just some of the things you should be aware of before signing.
The Globe and Mail has reported that the average maintenance fees for Toronto were 65 cents per square foot last year, with 22 cents at the low end and $1.35 at the high end. The average increase last year was 2.5 per cent, which is significant when compared with the 1.6-per-cent rise in the inflation rate in 2017.*
Your building will also require general repairs and upkeep; your condo maintenance fees will cover this. Some of your condo maintenance fees will also go towards what is called a Condo Reserve Fund. This joint fund is meant for major repairs such as roof repairs or new HVAC units. Some buildings include everything, but major repairs are a bit of a different story.
The Condominium Act of 1998 requires that condo owners conduct necessary repairs within a prompt period of time.**
The Act requires that the corporation repair the units and common elements after damage. This obligation can be altered by the corporation’s declaration. Additionally, the corporation’s repair obligations do not include any improvements made to the unit, as defined by their standard unit by-law. If damage is done to the unit, the owner may review their corporation’s governing documents to define the repair obligations.
When buying a resale condo, it’s extremely important you obtain a copy of the status certificate with your lawyer before being locked into your purchase. Typically, a condo status certificate is part of a package that also includes the condominium declaration (outlining the building’s by-laws, rules and regulations), a copy of the insurance certificate, financial statements and a summary of the most recent reserve fund study. This clause is not part of the standard agreement, however, and should be added to an offer by your realtor.
Overall, your condo fees are based on the amount of ownership you have of the building itself. If you own 10% of the total condo property, your condo fees will be 10 per cent of the yearly operating budget. The community’s budget considers expenses like garbage collection, paying property managers, liability insurance, general maintenance and improvements, plus an additional amount to set aside for the unexpected costs.
Start your real estate search here*Source: How not to get hammered by rising condo fees https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-how-not-to-get-hammered-by-rising-condo-fees/
**Source: Condominium Act, 1998 https://www.ontario.ca/laws/statute/98c19
Hi, my name is Dana McAroe. I'm a Real Estate Agent in Fort McMurray. I help people get the best possible outcome from their real estate transaction - whether they are selling or buying or a house.