When buying a condo, maintenance fees are something that buyers look at. Maintenance expenses can include maintenance of the common areas, property and liability insurance for the building’s exterior and common areas, and utilities. But what is not expected is when condo fees are increased by extraordinary amounts. Condos are not just high-rise buildings, they can also be low-rise buildings, row townhomes, or even detached homes.
Builders are under estimating the monthly condo fee and promoting these fees so that they are more appealing to buyers. However, buyers are being caught off guard when builders increase the monthly fees buy large amounts and in a short period of time. By increasing fees so dramatically it places unnecessary stress on buyers who have budget themselves accordingly.
In Toronto, the average condo fee is estimated to be close to $0.50 per square foot, but can reach as high as $1.00 or more. There are many factors that go into calculating a condo fee such as the age and size of the building along with its amenities. (https://www.ratehub.ca/condo-fees)
This month, the province is establishing the Condominium Authority of Ontario (CAO) to provide education and mediate disputes over access to condo records. (Owners will pay on average an additional $12 a year to fund the CAO.)
The provincial government has been working since 2015 on legislation for fair disclosure on maintenance fees and finances. Beginning this fall, the first phase will come into effect where condo boards will be required to be more transparent about their finances.
According to officials at the Ministry of Government and Consumer Services, the legislation will:
- Provide clearer rules to prevent buyers from being surprised by unexpected post-purchase costs on a new condo;
- Require developers to disclose conditions that may lead to an increase in common-area expenses within a set period of time after the corporation’s first year (e.g. elevator maintenance contract);
- Prohibit developers from selling or leasing common-area amenities such as gyms or party rooms, a practice that may raise condo fees.
The new policy also puts an additional responsibility on condo boards and management companies to be transparent with financial documents, improve communications with owners and forcing directors to reveal conflicts of interest.
The Ontario government’s slow-moving bid to improve the governance and financial management of condo corporations should help buyers navigate what has traditionally been one of the trickiest elements of investing in apartments, both existing and new-build.
With a healthy percentage of condominiums in Markham, condo fees can be a touchy subject. In York Region, as of the end of August, there are currently 980 condo type homes available for sale. Often first-time buyers will look to condo type homes for their first purchase as condos tend to be lower in cost and offer a lower maintenance lifestyle. Benczik Team Realty is your local experts for condo purchases. Let us advise you how to navigate through the complex issues that may arise when purchasing a condominium.