If you’re buying a condo for the first time, your agent will talk to you about condo fees, a monthly expense that you pay directly to your condo corporation. These fees are non-negotiable and every condo owner has to pay them.
The original listing will state what the maintenance fees cover, but these should be verified for accuracy in the status certificate. While this varies from building to building, they can cover any or all of these expenses:
A portion of your condo fees also goes toward your building’s reserve fund, a corporation controlled fund that covers emergencies and long-term maintenance projects like building roofs or elevator replacement. It’s mandatory that each building have this fund; if they didn’t, condo owners would have to fork out a lot of money if a substantial expense came upon the building, without being able to adequately budget for it.
Condominium corporations set the operating and saving budget, and divide it by the owners on a proportionate per-square-foot basis. The larger the unit, the more you’ll pay in condo fees, as you own a larger portion of the building than someone with a smaller unit.
When looking at prospective units, be sure to ask about square footage—and whether calculations include your balcony square footage, parking spot, and locker.
Condo fees vary by city. In Toronto, for example, the average monthly condo fees are $0.60 per month per square foot, considerably higher than in Vancouver, at $0.35.
Although it’s not always true, large or tall buildings tend to have lower condo fees, as the overall expense is distributed to more owners. Older buildings tend to need more repairs, having the potential for higher condo fees if the reserve fund has not been adequately managed. So, although converted factory lofts are beautiful, you can expect them to be at the top of condo fee lists.
A building with many amenities will typically have higher condo fees than one without any. Swimming pools, gyms, party rooms, guest suites, and green spaces all cost money to maintain and operate, which pushes your fees up. A large ticket item for condo management is staff like security guards, concierges, and maintenance crews.
Your condo board is a group of people that make decisions on behalf of the owners and tenants renting from owners. Most or all of the board are elected from the condo residents.
The board oversees the fiscal health of the corporation and is responsible for hiring a management team to carry out day-to-day work. The members review residents’ complaints and communicate with owners.
The condo board has the ability to raise condo fees, if the building’s costs are going up or the fees have not been raised high enough to fund the reserve.
A status certificate provides valuable information about the condo corporation and the financial situation of the condo. Before you buy a condo, be sure to obtain a status certificate from the board or management; it includes points on budget, legal issues, the reserve fund, maintenance fees, and any fee increases expected in the near future.