So when you decide to jump into the condo market, one of the first things you should ask your realtor about are monthly condo fees. While condos fees can fluctuate wildly from building to building, looking at other buildings by the same developer can show you if fees have increased. They do this because of differences in amenities, location, and management, age of the development and size of units. These are just some of the things you should be aware of before signing.
The Globe and Mail has reported that the average maintenance fees for Toronto were 65 cents per square foot last year, with 22 cents at the low end and $1.35 at the high end. The average increase last year was 2.5 per cent, which is significant when compared with the 1.6-per-cent rise in the inflation rate in 2017.*
Your building will also require general repairs and upkeep; your condo maintenance fees will cover this. Some of your condo maintenance fees will also go towards what is called a Condo Reserve Fund. This joint fund is meant for major repairs such as roof repairs or new HVAC units. Some buildings include everything, but major repairs are a bit of a different story.
The Condominium Act of 1998 requires that condo owners conduct necessary repairs within a prompt period of time.**
The Act requires that the corporation repair the units and common elements after damage. This obligation can be altered by the corporation’s declaration. Additionally, the corporation’s repair obligations do not include any improvements made to the unit, as defined by their standard unit by-law. If damage is done to the unit, the owner may review their corporation’s governing documents to define the repair obligations.
When buying a resale condo, it’s extremely important you obtain a copy of the status certificate with your lawyer before being locked into your purchase. Typically, a condo status certificate is part of a package that also includes the condominium declaration (outlining the building’s by-laws, rules and regulations), a copy of the insurance certificate, financial statements and a summary of the most recent reserve fund study. This clause is not part of the standard agreement, however, and should be added to an offer by your realtor.
Overall, your condo fees are based on the amount of ownership you have of the building itself. If you own 10% of the total condo property, your condo fees will be 10 per cent of the yearly operating budget. The community’s budget considers expenses like garbage collection, paying property managers, liability insurance, general maintenance and improvements, plus an additional amount to set aside for the unexpected costs.
*Source: How not to get hammered by rising condo fees https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-how-not-to-get-hammered-by-rising-condo-fees/
**Source: Condominium Act, 1998 https://www.ontario.ca/laws/statute/98c19