Condo Maintenance Fees Climbing

For young families, condominiums have become reliable alternatives for homeownership, particularly in major urban centres. In Toronto, for example, the average selling price for a detached house is north of $1 million. By comparison, the average sales price for a condo suite is around $750,000. This is huge savings for the typical household residing in North America’s fourth-largest city. But while it is cheaper to acquire an apartment, there are a few costs that condo residents need to endure each month: condo maintenance fees. These are fixed monthly costs that units need to pay to help cover the day-to-day expenses associated with taking care of the building, from maintaining the infrastructure to paying for front-desk security. One of the drawbacks of owning a condo is that these are permanent month-to-month costs. So, even after the mortgage has been paid off, units will continue paying condo fees each month. Indeed, for many, it might feel like rent. For others who live on fixed incomes, condo fees could take up their entire earnings. “My monthly income will be entirely taken up with living,” Carole Benner, who lives alone in northwest Calgary, told CBC News last year. “There’s no excess to fall back on for anything. And that’s not a very good way when you’re at my age.” In today’s inflationary environment, many families are witnessing higher condo maintenance fees without any end in sight. But why is this happening? Let’s take a deeper dive. Condo Fees: A Primer First, what are condo fees anyway? Every condo owner pays a regular, fixed, and non-negotiable condo fee. The rate is determined based on your share of the building, and the fee is adjusted each year based on the building’s operating budget. Put simply, the larger your unit, the greater your monthly fee. Condo fees are also meant to pay for utilities, common areas, and the reserve fund. So, for example, condo fees will cover the costs associated with property maintenance and snow and garbage removal. Or, as another instance, condo fees will pay for amenities like the pool, gym, or in-house theatre. It should be noted that the condo fees do not include the in-suite air conditioning, heating, gas, and other utilities, especially for newer builds. This will be extra. Ultimately, housing market experts estimate that owners can expect to pay anything from a couple of hundred dollars to more than $1,000. Why Are Condo Maintenance Fees Climbing? Indeed, every condominium is different as each one possesses its own characteristics: age, size, amenities, outdoor spaces, elevators, number of tenants, and reserve funds. Over the last few years, businesses and consumers have been contending with higher prices. This has created a spillover effect, resulting in growing costs for everything, from labour to raw materials to parts. While mowing the lawn might seem like the same task as it was in 2019, the cost of equipment, fuel, and labour is much higher. Moreover, the fees cover condo insurance for a portion of the building that is owned in common. But the issue has been that insurance premiums have been soaring, mainly when there are major weather events. The other factor with insurance premiums, according to industry experts, is that there are fewer companies in the market competing, resulting in higher rates. But the big thing is that condos need to maintain a reserve fund. Every building needs to have a rainy-day emergency savings account for expensive repairs, replacements, or purchases. So, for instance, if the entire HVAC system needs to be replaced, the building can tap into the reserve fund. Industry experts warn that condo fees that are too low might not have enough in the reserve fund. If there is a Special Assessment and the reserve fund is inadequate, every condo owner must toss his or her share into the pot to cover the cost. At the same time, residents need to be wary of anything that appears excessive. In other words, it is a balancing act for suites. Condo Owners Need to Be Vigilant In the end, condo owners need to be vigilant about what happens in the building. While many condo managers will do everything they can to find savings, obtain the best contracts, ensure the reserve fund is managed well, and make certain that everything that needs to be done is remedied accurately and quickly, residents must also keep track of what is happening. This will undoubtedly take more time for busy occupants, but it is imperative that you are aware and up to date on everything transpiring inside the condominium. This way, you know what you are paying for, particularly in today’s

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