Condo Fees: What Real Estate Buyers Need to Know
Tuesday Jun 18th, 2019
First-time buyers, downsizers and even move-up buyers concerned about the cost of living are increasingly making condos their home of choice in Mississauga. Whether a high-rise condo apartment or a condo townhome, this property segment offers buyers many benefits that include greater affordability, as well as access to urban conveniences, public transit and proximity to schools, employment and community supports.
There’s also the appeal of less maintenance and responsibilities that often burden owners of single-family dwellings. Active seniors especially love the lock-it-and-leave-it lifestyle of condos that allows them to travel and engage in hobbies without the burdens of traditional homeownership.
And, while this all sounds well and good, owning a condo does come with its costs – specifically, condo fees. Every owner is required to pay these non-negotiable fees and they are based on each owner’s share of the building. To put it simply, the larger your unit, the higher your condo fees will be. This figure is also re-calculated annually based on the condo’s operating budget. It’s not uncommon for these fees to increase.
Each condo corporation is unique and what’s covered by the fees will vary. In some cases, utilities (like hydro, gas, water, cable and telephone) are covered, while newer buildings may feature suites with individual HVAC units that owners are responsible for their usage.
There are also amenities to consider, like swimming pools, saunas, fitness facilities, party rooms, in-house entertainment areas, as well as indoor and outdoor spaces. The more amenities that a condo has, the more upkeep and maintenance it will need, which translates into higher condo fees for owners. When buying a condo, I always encourage clients to consider how much they intend to benefit from these facilities. Whether owners use these amenities or not, they are still on the hook for paying for them.
Condo fees can also cover practical costs, like garbage removal and recycling, snow clearing, common area cleaning and regular maintenance or repairs. A portion of condo fees are also set into a reserve fund for larger ticket items, like a new roof, replacement of underground parking garage membranes and other large expenses. When a reserve fund doesn’t have enough money to cover a major repair, each condo owner will be issued a special assessment. This is on top of the monthly condo fees and it is mandatory.
When deciding to buy a condo, it’s very important to know what the fees are, what they cover and how much money is in the condo’s reserve fund. Before you make an offer, be sure to have your realtor request a copy of the condo’s status certificate, which contains important info about the development’s financial status. This document may include information about the condo’s budget, any ongoing legal matters, information about the reserve fund, current maintenance fees and whether any increases are expected.
It’s also important that buyers take a close look at their budget to ensure that they can afford the monthly condo fees for their prospective home, as well as an additional savings buffer should condo fees increase or a special assessment is levied.
There is certainly a lot to consider when buying a condo beyond the usual factors, like location, asking price, layout and amenities. That’s why you should rely on the knowledge, expertise and advice of a trusted real estate professional, who is highly-skilled to work within the condo property segment.
To learn more, please contact me, Deborah Clerk, Real Estate Sales Representative, ASA with Keller Williams Realty Solutions, Brokerage in Mississauga, Ontario.