When you get ready to purchase a condo, you might be surprised to find out that, beyond just your mortgage, you have to budget for an additional payment each month that will cover a variety of expenses – and it’s not usually cheap.
Condo fees (also known as strata fees) are mandatory, non-negotiable fees that every condo owner has to pay to their condo corporation (or strata board). What they pay for and how much they cost varies from building-to-building, but here’s a breakdown of what you may be looking at.
What do my condo fees pay for?
Exactly what your condo fees will pay for varies, but typically they will: partially cover your utilities, pay for common area maintenance and contribute to the building’s reserve fund.
It’s not uncommon for your condo fees to partially cover water and hydro, and sometimes even heat. In some older buildings, heat is centrally located and is expensive to run, so the cost of heating is often split evenly amongst the units based on square footage. Most newer buildings do not include heat, especially if units have their own heat-pump systems.
Your condo fees also act as your contribution to the operation and maintenance of all common areas in the building, including everything from your lobby to the gym, trash and snow removal services, and any repairs to the building’s shared elements.
Finally, a portion of your condo fees will go into the building’s reserve fund, which is essentially an emergency savings account for your building. It’s mandatory that all buildings have a reserve fund, to ensure condo corporations have money for any unexpected repairs or replacements.
How much will my condo fees cost?
Condo fee amounts vary – and not just from building-to-building, but also city-to-city all across the country. For example, in the Toronto condo market, the average monthly condo fees are $0.55 to $0.65 per square foot, whereas in Vancouver the average for a high-rise ranges from $0.30 to $0.40 per square foot. In a 600 square foot condo, that’s a difference of $150 per month.
Besides location, there are some other elements that factor into your monthly fees: building size, age and the amenities available all play a part.
For example, the size of the building may or may not contribute to the overall monthly condo fees. It’s not always the case, but larger buildings tend to have slightly lower monthly fees, as total costs are split between more units.
Older buildings tend to have higher fees, since common elements may need to be fixed or replaced more often than in a newer building. However, some newer buildings that are amenity-heavy may have higher fees, since amenity maintenance can be expensive.
Finally, swimming pools, fitness facilities, and party rooms are popular features of many condo buildings across Canada, and the cost of maintenance and operation of these amenities are passed down to owners via condo fees.
What else do I need to know?
Some condo owners don’t realize that their condo fees can increase at any time. The monthly fees you pay are controlled by your condo board, and the board is able to change the fees at their discretion. When considering buying a condo, it’s a good idea to make sure you can afford the current condo fees, as well as a potential increase.
Every building has something called a status certificate, which provides you with important information about the financial status of the condominium and the corporation that runs it. It’s worth reviewing the status certificate before you buy your condo, because the document includes things like the budget, any legal issues the building may be facing, the status of the reserve fund, current maintenance fees and information on any large fee increases that may be coming in the near future.