If you are thinking of purchasing a condominium, you must calculate building or townhouses Condo/Strata Maintenance Fees. We’ll start answering a few questions common questions to assist you in your understanding of Condominium or Strata Maintenance Fees.
What are Condo Fees?
Condo maintenance fees are your percentage share of the costs to run the building as a whole and are charged to cover cost of landscaping, amenities, repairs, insurance etc. Usually they are charged monthly. In many cases townhouses pay a lower monthly fee but will have additional utility bills. Condo fees are similar to fees you would need to pay if you purchased a house, the difference is you don’t have very much control over how the fees are spent and you are sharing the cost of maintenance with the other condo owners. If you decide you don’t want to purchase a condo because you think condo fees are extra, remember a house will require repairs and maintenance and can also get very costly. Also as a hurrah for Condo’s, some Condo Maintenance fees include extras like Heat, Cable, Internet, Insurance and more.
What is Included in the Condo Fees?
Fees are calculated from annual operating costs of the condominium and divided as a percentage of the contribution you would make to the common expenses. To give you a better idea, we’ve listed some of expenses which may include the following:
- Upkeep of common property elements (landscape, carpets, painting, exterior windows, etc.)
- Contribution to the Reserve Fund used for major repairs
- Property Maintenance Fees
- Condo Employee Salaries such as security guards, superintendent, pool or gym staff etc.
- Amenities, such as recreational facilities.
- The Corporation insurance policies
- Cable or internet
What is a Condominium Status Certificate and why would I require it?
The certificate gives the potential buyers of condo units as much information as possible about their unit as well as the physical and fiscal situation of a building. The certificate has some basic and also vital information on the Condo. This is an overview of the financial health of the condominium. Your lawyer will review the certificate and they will you a review of the financial health of the condo. The Condo Status certificate usually includes the reserve fund, financial status, existing by-laws and active litigation claims are all outline among other important items. See an example of the Ontario Condo Status Certificate
What to Keep in Mind with Condo Fees
Your building or townhouse complex may include a gym, pool, sauna, indoor parking, game room, Patio’s common areas and other amenities. While these are nice and great selling features, they require maintenance and repair keep this in mind when doing your home hunting.
What You May Not Know
Condo/Maintenance fees can rise at any time. According to a news-release from TD Canada Trust posted November 29, 2012; new research conducted by TD Canada Trust by surveying condo buyers in Toronto, Montreal, Calgary and Vancouver revealed, 68% of buyers didn’t realize condo fees may increase at any time and more than one-third (38%) say they don’t have confidence that they could afford an increase. When calculating your Mortgage, include you Condo-Fees as part of the mortgage but don’t forget to build in a little extra to put away (just as you have an emergency fund for you home) just in case you need to use it. To assist you to calculate Mortgage Affordability, check out our Affordability Calculator that factors in Condo Fees.
To assist you with your understanding of Condominium or Strata Maintenance Fees, contact your local mortgage broker to find out more about fees and best mortgage rates.