Everything You Need To Know About Condo Fees
Thursday Aug 06th, 2020Share
Are you in the market for buying a condo in Toronto? If that’s a yes, you have probably already noticed a wide range of condo/maintenance fees in the city. Let’s take a closer look at these fees – what they are, what’s included and how they differ.
What are condo fees?
Condo maintenance fees are paid by all condo owners and are typically representative of the percentage that you own – the bigger your condo, the higher your maintenance fees. As a condo owner, other than your own actual unit, you also own a percentage of the hallways, the lobby, the gym, etc., known as the “common elements”. Condo maintenance fees go towards paying the operating costs of the common expenses and elements. This generally includes:
- Building insurance
- Upkeep and repairs to common areas
- The heating and cooling system
- Water and sewer pipes and
- Staff employed by the condo corporation (e.g., security guard or superintendent)
A portion of monthly fees are also set aside and put in a reserve fund for future expenses, like a new roof or furnace.
How do condo fees differ?
Condo fees vary widely – in Toronto, we regularly see condo fees ranging from $0.50/sqft to over $1/sqft. The market average in Toronto is currently between $0.70 to $0.80 a square foot. Generally:
- The more luxurious amenities and more staff = higher condo fees – a concierge, fitness centre, indoor pool or rooftop lounge don’t come cheap.
- Older buildings = higher condo fees – as the building ages more big ticket items need to be replaced such as a new roof or updating the lobby.
- Smaller buildings = higher condo fees – the cost is simply split between less people, making everyone’s fees higher.
Other things to consider:
Condo maintenance fees are real dollars that are a big part of your monthly carrying costs. They’ll go up every year – generally a few percentage points, so make sure to budget for that. If you’re looking at buying a newly constructed building, expect them to increase substantially in the first few years as the real costs of operating the building become known.
When you buy a condo, any expected increase to the maintenance fee is disclosed in the status certificate – a document that should be reviewed by your lawyer, explaining what you own, confirming what the condo fees cover and providing some insight into any extraordinary condo fee increases or decreases.
It is also possible that something called a special assessment is enacted. A special assessment is an additional payment that condo owners must make in the event of an expected shortfall or an added expense - perhaps caused by a flood or major storm damage. This is something a condominium owner must be prepared to shell out for.
If you are looking to find out which some of the best managed condominium buildings in Toronto are, reach out to us and we can provide a list with you, depending on which part of the city you are looking in.