Condos and Fees

Condo Fees or maintenance fees are monthly expenses each unitholder pays for common/shared elements. The fees can include insurance, water, utilities, parking, maintenance, etc. Each unitholder pays their proportionate share, most often using square footage as the benchmark. Fees can also be affected by things like ownership of parking spots, lockers, higher floors, views, etc. A Buyer will learn of the exact maintenance fee in the Status Certificate as a source of verifying what is on the MLS listing. Sometimes a vendor will not provide the updated fee or the fee could have changed since the listing. Approximately 10% of the maintenance fee goes into whats known as the "reserve fund", which funds for the most part the common elements and repair. In the event of a major repair, the Reserve fund is the first source. Should there not be enough funds alotted at the time of the repair, then there will be a Special Assessment. Each unitholder will be quoted an increased amount on top of their maintenance fees for a specified period of time to pay for the fix. What is interesting is that maintenance fees are often costly on a newer building as you have expenses like new windows and sodding and landscape, etc. With that it must be pointed out that older building with well established reserve funds and budgets can also face a period when windows need replacement and furnaces, etc. Like a lot of things in life, it really boils down to timing. If you get into a building in year 20 and in year 21 major expenses and updating is needed, then you'll pay for it! As I've always held, look to condos for ease of lifestyle and location. You can't get too hung up on the expenses. You need to understand the expenses and ensure that their affordable for you. You also want to make sure you're going to use the common elements. And finally know that each owner has a vested interest in the upkeep of the building, so when fees rise it often equates to an improvement for all to enjoy in the building, save for the opposite when you get dinged for a flood!