Condo fee guide

Every condo owner in Canada has to pay condo fees. Why?

Owning a condo isn’t exactly the same as owning a detached house. A condo is part of a small community, and condo fees are like a subscription fee for belonging to that community. Condo fees cover a range of important things.

In this article, we’ll explain which things condo fees cover, and how condo fees are calculated.

What are condo fees?

Condo fees are a mandatory monthly charge that everyone who owns a condominium must pay.

These fees go to the condo corporation—an entity shared between all owners that operates the building and is in charge of all the common property. Condo fees are also known as strata fees, maintenance fees, or co-ownership fees.

The condo corporation uses these fees for many things, like maintenance, landscaping, insurance, and more. We’ll go over what condo fees cover in the following section.

Condo fees are set for each unit, and are non-negotiable. When you buy a condo, the fees are the fees, and you don’t get to negotiate that aspect of the purchase. You can, however, find out what the fees will be before you make an offer, so at least you can budget for them.

Since condo fees are mandatory, there’s no way to skip out of paying them if you’re a condo owner. Someone who’s way behind on condo fee payments can find themselves in serious legal trouble with the condo corporation—even being forced to sell their unit in extreme cases.

Condo fees are separate from mortgages, and separate from property taxes. So, while condo living can be an affordable way to get into homeownership, it’s important to budget appropriately.

What do condo fees cover?

Condo fees cover several things, some of which are unique to condo buildings.

Reserve fund

One of the most important things that condo fees go towards is the condo building’s reserve fund. The reserve fund is money set aside for major, irregular expenses that the condo corporation may have to pay for. A portion of every month’s condo fees go into the reserve fund.

Reserve funds are mainly for significant repairs or replacements that the condo corporation’s insurance policy won’t cover. For example, replacing an aging HVAC system doesn’t fall under insurance, so the condo building would have to pay such a cost out of their reserve fund.

The reserve fund can also be used for things like repainting the building’s exterior or repaving the parking lot. Any maintenance or repair task that’s not routine may get paid out of the reserve fund. Elective upgrades often require an owner vote before any reserve funds can be spent.

If a major repair comes up and the reserve fund doesn’t have enough cash in it, the condo board can issue a special assessment. A special assessment involves each owner pitching in to pay for the difference.

Maintenance

While condo owners are responsible for maintaining the interior of their homes, everything else on the condo property is the condo corporation’s responsibility. Maintenance costs money, and that money comes from condo fees.

Things like mowing lawns, washing windows, trash and recycling pickup, and snow removal all get paid for by the owners’ condo fees.

Insurance

The condo corporation must have a master insurance policy that covers the condo building. Part of each owner’s condo fees go toward the master policy premiums. Despite this, each owner needs to have their own condo owner insurance as well.

Property management

Most large condo properties hire a property manager to oversee day-to-day operations. Condo fees pay for the property manager (or management company).

Staff

In addition to a property manager, some condo buildings have additional staff. Caretakers, door attendants, security, and any other on-site staff are all covered by condo fees.

Utilities

Condo fees normally cover at least some utilities, like electricity and water. Heat may also be included, depending on the building’s heating system. Telecommunications like cable or internet are rarely included in condo fees.