You have a love/hate relationship with them. On one hand they are an expense over and above your regular mortgage or rent. But, they do provide you with a certain amount of luxury: Snow-free sidewalks, yard maintenance, maybe even heated parking — and it creates a pool of money for maintenance, so you don’t necessarily have to fund major repairs on your own.
That’s right. We’re talking about the condo fee. But it’s important to dispel the common myth that there is a ‘reasonable’ amount for such fees. According to Sandra Johnston of Insight Condo Services Inc. in Calgary, comparing condo fees from one complex to the next is virtually impossible — all developments are not created equal. “There is no norm,” said Johnston, noting that everything from the type of siding to roofing and the age of a building are all factors that determine a condo-fee. “It will depend on all of the maintainable items each condominium has.”
It makes sense, too.
Condo fees differ from place to place because the determined cost is relative to the amount of maintenance required and any projected repair or replacement costs.
For example, it costs less to maintain a brick exterior than it does a wood exterior that has been painted. Older buildings could have future upgrades too.
In some cases, Johnston said, you can expect certain things from your fees. She said, for example, fees for apartment-style condo should include heating, water, sewage and common property insurance. It will also likely include administration fees, legal fees and the cost to have an annual audit done.
You will also see the condo complex reserve fund — set up to defray the cost of major renovations.
“It important to always have enough money to complete the work that needs to be done,” said Johnston, noting that condo boards don’t want to apply a special assessment to condo owners for repairs unless they have to. Johnston underscores the importance for condo-buyers to do their homework prior to making a purchase.
Asking for company financials, budgets and future repair or maintenance schedules of the condo complex is critical. This may give you clues to the operation of the condominium corporation.
“It just makes sense. In order to protect your investment you really need to do your homework.”