Clean T.O: Truth About Condo Fees

So you want to buy a condo in Toronto, but have you thought about the condo fees? If you’re looking to live a condo lifestyle, you’re on the right track. However, if you’re thinking about buying a condo because it would be cheaper than a house, you might want to factor in condo fees. Don’t worry, it’s very common for first-time condo buyers to be unaware of just how daunting their fees can be. We’re going to give you the information you need to help yourself make an informed decision when buying a condo in Toronto!

What are Condo Fees?

Let’s take a closer look. The condo fees you will pay is your direct share of the cost it takes to run the building. As a result, there are a variety of factors that contribute to your fees. For instance, utilities, building amenities, location and the age of the building all come into play. Additionally, if your building comes with extra security, concierge service or underground parking, a pool, gym, or a rooftop patio- chances are they will be reflected in your monthly fee. However, extra features like underground parking and concierge service are typically optional. There is also something called a “contingency fee” mandatory for every condo. That contingency money goes straight into a reserve fund, to safeguard against unexpected costs that arise, like flooding or roof damage.

Condo vs. House

Remember that time when you were looking at that condo in Toronto, and the maintenance fees seemed reasonable? Don’t be fooled. By and large, condo fees always have the potential to increase to rates much higher than you signed up for. Meanwhile, most condo-owners don’t realize that their condo fees are controlled by the condo board, and can be increased at their discretion. But rest assured, the fees are not a source profit for management. This is ensured by the fact condo buildings are registered as nonprofit corporations.

When you combined condo fees with property taxes and mortgage payments…you’re looking at costs similar to owning a home. In fact, when you do the math, a condo purchase in Toronto plus maintenance fees works out to approximately the same as owning house! At the end of the day, it comes down to lifestyle. Would you rather tend to your own garden, or never have to worry about yard work again?

Old Condo vs. New Condo

Presumably, the older buildings of Toronto require much more maintenance and renovation than brand new ones. For instance, modernizing the front entrance of an old building is something that belongs in the maintenance budget, paid for by the condo owners through their fees. Even so, if you’re considering buying an older condo in Toronto you should check out this article.

However, newer buildings aren’t perfect either. As with any booming industry, there becomes more potential to cut corners. More and more, we have seen that new buildings in Toronto are using sub-par building materials for construction. In fact, issues brought on by shoddy construction can increase condo fees just as much as renovating an entrance from the 90’s!

Being Smart About Condo Fees

Ultimately, if the condo you are considering has fees that are already out of your price range- you might want to look elsewhere. This will give you more breathing room when the fees inevitably go up. If you are seriously eyeing a condo in Toronto, it is highly recommended that you get a realtor or real estate lawyer to review the condominium status certificate. Every building is required one, because it gives residents essential information about the financial health and stability of the building.

In the document, you will find things like the management contract, legal issues the condo may have encountered, the budget and status of the reserve fund. After reading status certificate, a lawyer will easily be able to tell you if this condo is worth your investment. Therefore, it’s worth it to invest a little time and research into purchasing your condo in the city, your future self will thank you.

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