How Often Do Condo Fees Increase?

Also referred to as "maintenance fees", condo fees are required by the condo corporation to cover the cost of maintaining all common areas of the building.

Depending on your complex, these common areas could be extensive, or they could be bare bones. Generally speaking, the more amenities your condo complex has, the higher your maintenance fees will be.

All unit owners share the cost of maintaining the building and its operations.

What Do Condo Fees Cover?

One of the biggest perks of living in a condo is that you have pretty much nothing to do to maintain your property. Instead of having to cut the grass, shovel the snow, or take care of any other maintenance chores or repairs, the property management company does all that for you.

But this lack of maintenance on your part comes at a cost. Your condo fees will cover all the maintenance and repairs required for the complex.

Condo fees typically cover the following items:

• Maintenance and repair of common areas, such as elevators, parking garage/lot, lobby, hallways, and amenities

• Operating costs, such as utilities, snow removal, lawn maintenance, garbage removal, window cleaning, and so forth

• Insurance

• Property management

• Contribution to the reserve fund

On a special note, a reserve fund covers expenses that are not covered by regular condo fees. This can include larger and unexpected expenses, such as roof repair, structural repair, and so forth. Every condo board is required to maintain a reserve fund, which is somewhat like a savings account that can be dipped into when unexpected and big expenses pop up.

There may also be what's called a "Special Assessment", which may be required if the funds in the reserve fund are not enough to cover a large expense. In this case, every condo unit owner will have to contribute to this assessment.

How Much Are Condo Fees?

Your condo fees are directly tied to the square footage of your unit. Generally speaking, these fees will be quoted on a square-foot basis. In Toronto, the average condo fee per square foot ranges from 50¢ to $1.00 per square foot or more.

For instance, if you're buying an 800 square foot condo with maintenance fees of 70¢ per square foot, you're looking at monthly maintenance fees of $560. If you buy a larger unit in the building, say 1,000 square feet, then you'd be paying $700 based on the same fee charge.

The condo corporation will have an overall number that they need to cover all required costs. The total contribution of your condo complex is typically comprised of the operating fund and reserve fund.

Your individual unit's condo fee is calculated by multiplying this total contribution by the unit entitlement of your condo lot, then dividing by the total unit entitlement of all condo lots in your complex.

How Often Do Condo Fees Increase?

Condo fees usually increase every year due to an increase in property taxes and inflation rates. Buildings that are well-managed will ensure that these increases are minimal. For instance, keeping the building in good shape and anticipating major repairs will ensure that the reserve fund is adequate enough to cover these costs.

But a poorly-run building with an inexperienced condo board could eventually lead to higher-than-normal increases in condo fees. For this reason, it's important to ensure the condo board in a building you plan to buy in is professional and experienced. 

If you're looking to buy a condo in Toronto or the surrounding GTA, we'd love to help. Reach out to The Lotus Group today!