Buyers of condos find the price range, low maintenance lifestyle and access to amenities favorably compared to buying a single-family dwelling. These benefits do come at a fee above and beyond your mortgage payments. This fee is called a condo fee. This article will explain condo fees as they are related to an apartment style condo building.
What are condo fees and how often are they due?
Condo fees are monthly payments made by the condo owners to a condo corporation. The condo Corp runs the condo building. The condo Corp manages the collected money to fund maintenance and upkeep of the building. All condo’s have a condo board made up of people from the building. The group manages the building on behalf of and in the best interest of all residents and owners.
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Condominiums are all different and the fees and what they cover will differ from one building to another. The size of the condo building can also be a factor in fees. A small building will likely not have the same fees as a large complex with over 200 units.
Common condo fees:
- Utilities – The Corp may pay some or all the building’s utilities such as water, electricity and sometimes heat.
- Reserve fund – the reserve fund is money set aside for repairs. The building may need to replace a boiler, roof for example, and use some of the fund to pay for it. Knowing how much money is in a condo reserve fund will help you understand a buildings financial position.
- Common areas – condo fees also go towards garbage, snow removal and maintenance of common spaces in and around the building. This includes hallways, lobbies, elevators, and the grounds.
- Amenities = Generally the more amenities a condo has the higher the fees will be. If the building has pools, saunas and/or a gym these areas require upkeep and can become costly.
Townhouse style condo
Some condo developments have townhouses and unlike a freehold townhouse you will have condo fees. Fees could cover garbage pickup, shared community amenities like an outdoor pool or gardens.
When do condo boards reassess fees?
When searching for a condo to buy, consider that lower fees in a condo could be a bad thing as the cash flow may not cover costs for large repairs or other unforeseen costs. Choose a condo with good track records.
A special assessment, which is in addition to regular condo fees, could also be required at some point in time. It is important to know the terms around special assessments as they will vary with provincial legislation. You should understand what your board can and cannot do.
Examples of special assessment fees for
- Unforeseen expenses may arise unexpectedly like a roof repair from a storm. This may happen if fees in the reserve fund have been depleted to complete a current project or renovation.
- Under budget – if a project costs more than the projected expense.
- Losing a lawsuit – the board cannot pay out a judgement from the operating funds so a special assessment would have to cover the costs. The CAO says unit owners must bear any judgement against the condominium.
Regardless of whether you’re a first-time home buyer or not, ask questions and keep informed. Roy Thomas can help navigate condo fees, status certificates, and every other aspect of your condo buying journey.
Roy Thomas SRES® (Senior’s Real Estate Specialist) is a REALTOR® with Sutton Group Professional Realty. Since 1991, Roy specializes in helping retirees with their later in life real estate transactions. Call Roy at 902-497-3031 or contact Roy here