Naturally, no one wants to pay condo fees, just as Canadians would prefer not to pay as much income tax as we do. But of course, with those taxes come many perks, such as free healthcare and education.
Condo fees, like income tax, offer many conveniences and security.
To put those who pay decently high maintenance fees at some ease, it’s worth noting the condo board is a not-for-profit entity, meaning that no matter what the money shelled out by residents, it cannot (legally) be pocketed by anyone. For some additional peace of mind, members of the board are almost always owners within the condo (if not, their role on the board should be highly scrutinized). This makes it in the best interest of board members to maintain the lowest possible condo fees for all.
The contribution of condo fees by all residents is pooled to fund endeavours that can be broken down into four categories. The first are commonly used amenities, which can range from grass cutting and snow removal, to simple fitness facilities, party rooms, guest suites, and parking, to even the more extravagant bowling alleys, tennis courts, media rooms, and pet grooming services (rare but I’ve seen one — I swear).
The second type consists of those larger undertakings known as “capital projects” in the condo world. The term capital project implies an addition or refurbishment that either boosts the value of the building itself or functions as a utilitarian improvement, such as the installation of new energy-efficient windows or gated entry to the condo grounds.
The third category — like taking a hammer to the condo’s piggy bank — is when dealing with unforeseen repairs and deficiencies. For cases such as these, the condo board generally sets aside part of the fees into a designated reserve fund, to be used when necessary.
And the fourth category is your utility bill. Most condos cover at least some of your utilities, with the exception of hydro (unless you live in a building built before about 2002).
While tremendously low fees are alluring, and sacrificing amenities is painless for some, it would be reckless for a building to operate without a ‘rainy day’ fund, or more technically speaking, the ‘reserve fund.’
Whereas condos are relatively newer constructions, some of the structures that house conversion lofts date all the way back to the late 1800’s, making it difficult for developers to create space for shared amenities such as fitness facilities or parking garages.
For example, the now residential building at 110 Hepbourne—originally an addition to St. Paul’s Presbyterian Church—was built in 1910. While the building’s lack of elevators and other facilities can be attributed to its age, this can be a benefit since it maintains the extremely low maintenance for its residents.
So while some would prefer to pass up the ability to go bowling without leaving their building, a bit of spy work (i.e. Google searching) regarding the management of a building can be a handy way to prevent future headaches—especially in those with temptingly low fees.
Residents of the Toy Factory Lofts in Liberty Village, for example, enjoy exceedingly low condo fees, while taking pleasure in their use of the building’s party room, guest suites, visitor parking, exercise room, concierge, and more. The board, after much careful deliberation of the needs of both the residents and the building itself, was able to reduce maintenance fees by 30 percent in 2015.
In buildings that can take note from the Toy Factory Lofts, savvy board members have the ability to maintain low fees without compromising too heavily on the amenities that residents know and love.
Condo fees usually increase with inflation each year. However generally, 60 to 65 cents per square foot is reasonable for any condo or loft, regardless of location (condo fees shouldn't be influenced by the market or location).
In the end, when shopping for the right condo, it’s important to work with a realtor who knows the buildings and their history. Have they been subject to recent Special Assessments? Have the fees been increasing above about 3% or 4% per year, and if so, why? A good realtor who specializes in a particular market will know these details, and offer advice accordingly.