Demystifying condo fees
We’ve probably all heard someone say they’d love to buy a condominium, but they don’t like the idea of paying condo fees.
“We see that $500 condo fee and ask, ‘what do I get?’ ” said Bernice Winter, CEO of Condo Check, a Calgary company that provides condominium services, including document reviews.
Winter says when people buy into a condominium, they buy into a share of responsibility for expenses related to operating, maintaining and repairing areas of the building used by all residents.
That can include everything from insurance and maintenance, to landscaping, various utilities, snow shovelling and eventual replacement of the building’s roof.
“So, when you think about it, in a single-family home, you’re paying all that anyhow,” said Winter. “You just don’t have someone telling you how much it costs every month.”
“IF YOU’RE BUYING INTO A BUILDING WITH SIX OR SEVEN AMENITY ROOMS, AND YOU ARE ONLY GOING TO BE USING ONE, OR NONE, THEN WHY PAY THE EXTRA COUPLE HUNDRED DOLLARS A MONTH?” – JOEL GWILLIM, CIR REALTY
Winter says the amount a homeowner pays in condo fees is calculated based on a condo’s unit factor, which typically is determined using the square footage.
However, she says Alberta’s Condominium Property Act allows unit factors to be determined in different ways, as long as it is spelled out in the condo corporation’s bylaws.
For example, all units in a building, regardless of size, might have equal condo fees, or condo fees might be calculated based on original sale prices.
Winter says that’s why it’s important to review the condominium documents to see how condo fees are determined before you buy.
Joel Gwillim, a REALTOR® with CIR Realty, says a buyer also needs to make sure they are comparing apples to apples when it comes to condo fees for different properties.
For instance, he says, a townhouse might have lower condo fees because the owner pays for their own utilities and must look after maintenance for things like the furnace or hot water tank.
But an apartment-style condo might have most utilities included in its condo fees, plus other maintenance expenses.
“Someone may say, ‘this townhouse is great, the condo fees are only $200,’ but that only gets you three out of 10 things,” said Gwillim.
If a real estate listing doesn’t provide a condo fee breakdown, Gwillim says your Realtor can check to see everything that is included.
He also says it’s important to buy a condo with amenities – such as a fitness room or swimming pool – that you will actually use, since you’ll share in their expense.
“If you’re buying into a building with six or seven amenity rooms, and you are only going to be using one, or none, then why pay the extra couple hundred dollars a month?”
Source CREB NOW Apr 2018