Increasing maintenance fees for a condo has become the ‘new normal’ in Canada. Many families are seeing increasing condo maintenance expenses in today’s inflationary economy, with no end in sight. Paying the condo maintenance fees is a must for a convenient and luxurious lifestyle. But what exactly do they include, and how much do they cost? If you are a unit owner or planning to become one, you must keep reading!
Understanding Condo Expenses
Every condominium owner must pay a fixed and non-negotiable condo fee regularly. The fee is calculated based on the size of the building and is adjusted annually according to the building’s operating budget. In simple terms, the larger your unit, the higher your monthly fee will be. These condo fees are also intended to cover the cost of utilities, maintenance of common areas, and the reserve fund. For example, they will be used to pay for property maintenance and services like garbage disposal or snow removal during the winter. Condo fees may also cover the price of extras like an in-house theatre, fitness centre, or swimming pool. It is important to note that the condo fees do not cover in-suite amenities like air conditioning, heating, and other utilities, specifically in newer buildings. These expenses are separate and additional.
Rise in Condo Maintenance Fees: Explained
Every condominium has unique characteristics such as age, size, amenities, number of residents, elevators, outdoor spaces, and reserve funds. In recent years, buyers have faced the challenge of increased costs across the board. This includes expenses like equipment, fuel, and labour, which have all become more expensive, even for seemingly simple tasks like lawn maintenance. Furthermore, the fees paid by condo owners also cover insurance for the shared areas of the building. However, the issue arises when insurance premiums skyrocket, especially after major weather hazards. Additionally, industry experts point out that the insurance market has become less competitive, resulting in higher rates.
Expenses Included in Condo Maintenance Fees
Typically, your monthly maintenance fees include the upkeep of shared spaces inside and outside, along with amenities, property management, staff, and a portion of your utilities. As the Condominium Act mandates, a fraction of these fees is allocated to the condo’s reserve fund. This reserve fund is a safety net for unforeseen repairs and maintenance, functioning as an emergency savings account. For example, the reserve fund can be used if the HVAC system requires replacement. In the event of a special assessment and an insufficient reserve fund, every condo owner must contribute their share to cover the expenses. Additionally, residents should know if there are any expenses that may seem excessive.
Being aware of the services included in your maintenance fees is important. Increasingly, condominiums are now excluding electricity and water bills from these fees. The specific inclusions can vary from property to property. For instance, if the water bill is covered, you can use a running tap or enjoy a long shower without additional monthly charges. However, while you won’t personally receive a water bill that fluctuates based on your usage, the overall consumption of the condo building will be monitored. If the building’s usage exceeds expectations, there may be an increase in your condo fees to offset the extra costs.
Cost of Maintenance Fees
The amount you pay for maintenance fees can differ based on a few factors, like the amenities your building offers, the age and size of the property if there are multiple buildings in the complex, and the height of your building (whether it is low-rise, mid-rise, or high-rise). Generally, older buildings require more repairs, so their maintenance fees are typically higher. It is important to be cautious if you come across an older building with unusually low condo fees, as it may suggest the building is improperly maintained. Also, the condo board has the authority to determine the maintenance fees for the condominium, and these fees have the potential to increase at any given time based on the decisions made by the board. In most cases, condo fees increase in line with the inflation rate, which means you can anticipate a slight annual increase.
Condo Owners Should Stay Alert
Lastly, condo owners need to keep an eye on the condition of their buildings. Residents must stay informed even as condo managers work to secure savings, favourable contracts, efficient reserve fund management, and swift issue resolution. This might demand extra effort, especially for busy occupants, but updating on all condominium developments is essential. This diligence ensures a grasp of expenses, which is important in today’s environment.
Conclusion
The current economic climate in Canada has made it commonplace for families to face the daunting task of dealing with rising condo maintenance fees. These never-ending costs have become a major source of worry and stress. Understanding the significance of condo maintenance fees is crucial to living a comfortable life. Whether you are considering buying a condo and want to make an informed decision or currently reside in one and need to manage increasing costs, staying informed about these fees is the most important. Taking a proactive approach allows you to comprehend the expenses involved, which is particularly important in today’s economic climate.
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Frequently Asked Questions (FAQs)
Yes, the maintenance fees of the condos can go up for several reasons, such as building maintenance, inflation, and other financial needs. The condo board or association can increase these fees to cover rising costs and operational expenses.
Maintenance fees, also known as condo fees or common expense fees, are additional payments apart from your rent, homeowner's insurance, and property taxes. These are made to the condo corporation to cover the maintenance and repair costs of the shared areas of the property.
Maintenance fees have to be paid every month.
In most cases, condo fees are calculated based on the unit's square footage. Can condos increase maintenance fees?
What do maintenance fees mean for condos?
Is condo maintenance monthly or yearly?
What is the maintenance fee calculated for?
