First-time condo buyers often question why, in addition to their monthly mortgage, they have to pay maintenance fees. There are a lot of great perks that come with living in a condo or condo townhouse and maintenance fees are part of the price you pay for this convenience. Let’s clear the air and get down to the what, why, and how much of condo maintenance fees.
Don’t be misled to think that homeowners are off the hook with respect to maintenance fees. Homeowners, while not a mandatory payment, should always be setting a monthly sum aside into an emergency savings fund. Every house, condo, or townhome costs money to maintain and repair. So what exactly do your condo maintenance fees cover?
When you live in a condo or condo townhouse you own a unit within a larger residential property. While you are responsible for the maintenance within your particular suite, all of the shared amenities, common spaces, and general upkeep of the property are handled for you.
One of the benefits of condo living is that you don’t have the added hassle of lawn care, snow removal, and ensuring your roof is still in good standing. All you need to worry about is the few hundred square feet you call your own.
Your monthly maintenance fees will generally cover the maintenance of both indoor and outdoor common areas, amenities, property management and staff, and some of your utilities.
A portion of your maintenance fees will go into the condo’s reserve fund. All Toronto condos are required to have a reserve fund, as per the Condominium Act, which acts as an emergency savings account for unexpected repairs and maintenance.
One thing to be cognizant of is what utilities your maintenance fees cover. More and more condos hitting the market are excluding hydro and even water in their maintenance fees. This will vary property to property.
Every building will be different, so when you’re in the process of buying a Toronto condo or townhouse make sure that you have your lawyer establish what is and isn’t covered under these fees for your particular property.
Maintenance fees will vary property to property. According to condos.ca, the average cost of maintenance fees in the Greater Toronto Area last year was 65¢ per square foot. So if you purchase a 650 square foot condo, that’s $422.50 per month in maintenance fees.
If you purchase a parking spot or a locker there will be an additional flat fee added to your maintenance fees. Parking will cost you anywhere from $50 to $85 more and a locker can cost an additional $15 to $25 per month.
Based on six recent pre-construction condo projects that have launched in Toronto over the past year, the average cost of maintenance fees was 57¢ per square foot, so a bit below last year’s general average.
Keep in mind, older buildings will usually have higher maintenance fees as the age and wear and tear of older buildings will begin to add up. Similarly, boutique condos may also have slightly higher than average maintenance fees as the overall cost of maintenance is divvied up amongst fewer condo owners.
As mentioned, older buildings and smaller boutique condo buildings will typically have slightly higher maintenance fees. For instance, the Cube Lofts in Little Italy is a four year old boutique property with only 21 units in total. Even with minimal amenities, residents here are paying 77¢ per square foot in maintenance fees.
It’s important to note that your maintenance fees can increase anytime, so it’s never a bad idea to budget for a potential increase. When buying a resale condo or condo townhouse be sure to check the property’s status certificate.
The status certificate will provide an in-depth overview of a condo building’s management policies, financial statements, the general health of the building among other things. If there are major upcoming repairs needed or if the reserve fund is low, this could mean an increase in maintenance fees is in the near future. These are things your real estate lawyer will help to identify.
When buying a pre-construction condo, you’ll begin paying maintenance fees when your condo is ready for occupancy. It’s not uncommon for maintenance fees to increase slightly within the first year or two.
Once the condo is registered with the city and a Board of Directors is hired, the board will begin to assess the finances and general operational costs that were established by the developer and this can result in an adjustment to your fees.
While it may seem like a bummer to have to dish out more cash per month to own a Toronto condo or condo townhouse, it’s a small price to pay for the hassle-free lifestyle that condo owners have.