Condo fees, officially called “common expenses,” are monthly payments made by unit owners to the condominium corporation. These fees cover operating costs and services that keep the building running smoothly, maintain amenities, and ensure common areas are well-kept. In this blog, we’ll break down what condo fees cover and what influences these costs.
What Are Condo Fees?
Condo fees, also known as “maintenance fees” or “common element fees,” are required by Ontario’s Condominium Act. They’re calculated according to each unit’s share of ownership in the building and are paid monthly, typically increasing each year to align with the building’s operating budget.
In most Toronto condos, where divided co-ownership is common, each owner contributes to the shared maintenance and amenities, which are overseen by a board of directors.
What Condo Fees Cover
Utilities: Utilities often make up a large part of condo fees. Many Toronto condos include water and heating in the monthly fees, and sometimes hydro and air conditioning are covered as well. In some cases, buildings have bulk contracts with providers to include services like cable, internet, or other digital options, which can add convenience and save costs.
Common Areas: Common elements include shared spaces like hallways, lobbies, elevators, and amenities. Part of the condo fees goes toward keeping these areas clean and well-maintained, so residents can enjoy a tidy environment without handling property upkeep themselves. This includes services like snow removal, landscaping, and general repairs. Larger tasks, like regular exterior window cleaning, are also covered. However, owners are still responsible for maintaining their own units. In buildings with extensive amenities such as pools, gyms, lounges, co-working spaces, and patios, condo fees tend to be higher to support regular cleaning, maintenance, and staffing of these areas.
Reserve Fund: The reserve fund is a required savings account set up by each condo board to cover major repairs and replacements, like fixing the roof or replacing the boiler. Part of the monthly condo fees goes into this fund to help protect residents from unexpected costs when big repairs are needed. If the reserve fund isn’t enough to cover a major expense, the condo board might issue a “special assessment,” a one-time fee charged to unit owners to cover the gap.
Factors Affecting Condo Fees
Building Age: Older buildings often have higher fees, as their systems and materials require more frequent maintenance or replacement. However, this isn’t always the case, as some older buildings may have robust reserve funds to offset frequent repairs.
Building Size: Larger buildings with more units can spread costs among more owners, potentially resulting in lower condo fees.
Amenities: The more amenities a building has, the higher the fees are likely to be, as these features require ongoing maintenance, staffing, and upkeep. Pools, fitness centres, and entertainment spaces are common in Toronto condos, so consider whether you’ll use them regularly.
Unit Size: Condo fees are usually calculated based on square footage, so larger units tend to have higher fees. Units with special features, like private terraces, may also have higher fees.
When Do Condo Fees Increase?
Condo fees are reviewed and adjusted each year based on the building’s operating budget. Increases may happen to cover rising costs or to add to the reserve fund.
Tips for Condo Buyers
When buying a condo, be sure to request a copy of the status certificate. This document outlines the building’s budget, reserve fund, maintenance fees, and any planned fee increases. In Toronto, the status certificate usually costs around $100, but it’s worth it for the valuable information it provides about the building’s financial health. While low condo fees might seem appealing, they can sometimes signal an underfunded reserve or deferred maintenance, so it’s important to look beyond the fee amount.
Conclusion
Condo fees in Toronto cover more than just maintenance – they also fund essential services, upkeep, and amenities that enhance your living experience. By understanding what goes into these fees and what affects them, you can make more informed choices and find a condo that fits both your budget and your lifestyle goals.
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