What are Condo Fees?
Condo fees are charges that condominium owners must pay for certain expenses needed to keep the condominium building or complex running. There is no minimum or maximum condo fee amount. Fees depend on many factors and all condominiums are different.
Real Estate Agent Explains Condo Fees
Many people do not understand why condo fees are charged, often thinking that someone is profiting from the fees (like a manager or some kind of owner). This is never the case. All condominium corporations are non-profit, meaning they cannot use the money for anything but the current and future maintenance and operations of the condominium.
Condo fees go towards making sure the building is well-kept, but their allocation is not set in stone. Sometimes condo fees are too low to maintain a building properly, or high because they were too low in the past and now they have to keep up with new maintenance issues that have been neglected.
The condominium board sets the condo fees with input from something called a reserve fund study, which tells the board what needs to be done when, and how much it is going to cost. If condo fees include utilities, utilities cost will be taken into account as well.
Condo fee amounts are different depending unit factor (based on the size of the condo unit). Larger units pay more than smaller units. Also it should be noted that the more that is covered by the condo fees, the higher the cost of the fees will be. Some condos cover the bare minimum required by law, and others have all sorts of amenities and perks that are included. For example, if a building has a swimming pool or underground parking, a portion of the condo fees need to be charged just to maintain these amenities.
Condo fees can be used to fund the following items:
- Cable TV, internet
- Caretaker costs
- Landscaping costs
- Snow Removal
- Professional management
- Recreational facilities
- Reserve fund contributions*
- Security personnel
- Water & sewer
- Exterior maintenance*
* These items must be included in the condo fees by law. All others are optional depending on the condo bylaws and the condo board.
Condo fees are usually charged on a yearly basis, but almost all condo boards allow monthly payments to be made.
Because condo fees pay for essential services, they are not optional, they must be paid – failure to do so may warrant legal action against the unit owner. People often ask if you have to pay condo fees. The answer is yes, you have to pay condo fees, you have no choice.
Why Does It Matter?
If you live in a house, you must pay for water, heat, exterior maintenance and insurance on your own. A condominium just forces that payment to be made at a regular interval to protect the building. It would only be your problem if your house falls down, but it would be everyone’s problem if a condo fell apart – and that is why condo fees are charged. Much like property tax or income tax, condo fees are a form of security that go towards paying for things you wouldn’t’ be able to afford on your own – like a whole new roof or an underground parkade. Without condo fees, a condominium couldn’t function.
by +Alan F Macdonald REALTOR® | Copyright © – gimme-shelter.com