What Exactly Do Condo Fees Cover?

With a boom in condominium construction over the past several years, the discussion surrounding new condo owners’ associated fees is a common one. Do these additional monthly fees range from old to new buildings and from neighbourhood to neighbourhood? In short, yes.

Generally calculated based on unit size, your monthly condo fee is your percentage share of the cost it takes to run the building. This includes such things as utilities, window washing, garden maintenance, snow removal, security/concierge, parking, etc. A percentage of this will be allocated to a contingency fund, reserved for unforeseen issues with the building such as roof, heating or plumbing repairs. Your building’s management is, by law, a not-for-profit company and therefore fees collected must cover building maintenance and contingencies, and not a penny more.

In certain buildings, utilities can be controlled and calculated on a per unit basis, in this case, condo fees cover common maintenance only. Your building’s amenities package also contributes to your monthly cost and fees will vary based on whether you have access to things like a gym, pool, rooftop patio, 24-hour security, or indoor parking. As you can certainly imagine, a building with a variety of amenities is more costly to run. That being said, new buildings tend to have lower condo fees than older buildings as their recent construction is often much more efficient.

The idea is for fees to remain on par with what it would cost you to own a home of a similar size, price range, and neighbourhood. Toronto condo fees average between $0.50 and $0.70 per square foot. The per square foot total is an important calculation to pay attention to. If you’re comparing two or more buildings when looking to purchase a condo, always ask for a list of services that condo fees cover to aide in your decision.

In some buildings, it is possible to opt-out of certain services (eg. parking), however it’s always good to keep your re-sale value in mind. Even if you don’t require a parking space, it will likely be an attractive feature when the time comes to sell.

Beware of pre-construction condos that offer monthly fees much below $0.50 as there have been reports of builders setting rates low in year one to entice buyers, and then subsequently raising fees significantly in years two, three and four. That said, it is absolutely normal and expected for your building to re-visit the maintenance budget each year and adjust your fees accordingly.