Condo fees: what they are and how they work
If it’s your first time buying a condo you may be confused by the concept of condo fees. What are they? Why do they exist? How do they work? And why don't apartments have apartment fees?
Condo fees are the additional costs associated with owning a unit in a shared building and can largely be chalked up to ‘maintenance fees.’ Condo owners usually have to pay their condo fees, property taxes, condo insurance and mortgages simultaneously.
Understanding the condo fee as maintenance
Condo maintenance fees are your share of the costs to run the building as a whole.
Since condominiums are multimillion dollar buildings, the cost to maintain amenities like pools, lobbies, gyms and whatever else can really add up. You essentially share this cost with all the other condo owners in your building.
If the pool valve breaks or the elevator falters, your monthly maintenance bill may spike temporarily. These fees are not going into the pockets of the condo corporation that manages your building; they’re only supposed to go towards the maintenance and repair of shared building features.
Condo maintenance fees also cover seasonal things like snow shovelling, leaf blowing, landscaping, window cleaning, gardening and anything else you can name.
Your unit size matters
Generally, these maintenance fees will correspond to the size of the unit. A two-bedroom’s condo fees will be more expensive than a bachelor or studio’s share. Depending on the annual operating budget, your fees will be recalibrated each year.
Contingency fees
There’s also a ‘contingency fee’ attached to the maintenance fee that each condo corporation must maintain by law. This fund goes on to cover any special or unexpected structural repairs on the building. If a roof suddenly needs replacing, the contingency fees go on to cover this incidental expense.
Are condo fees affordable?
Condo fees are usually most affordable in a new or pre-construction building because there is less maintenance required on a brand new build. Once the condo corporation figures out how much it actually costs to run the building, the condo fees are liable to increase in the first few years after the building is complete.
Condo fees for a one bedroom unit can cost around $500 per month in a small building without many extra amenities, while a ritzy two-bedroom unit in a 30 floor luxury building can cost over $2,000 per month for maintenance, plus hydro.
Condo fees are definitely something to consider if you’re looking to enter the market as a homeowner.