Everything you need to know about condo fees

For those on the hunt for a new condo, condo fees often make or break the appeal of a potential unit. These monthly dues, also known as common expense fees, strata fees or maintenance fees, are paid to the condo corporation that oversees your building’s upkeep and should be baked into your overall budget for a potential unit.

What do condo fees cover?

Owning a condo offers some similar perks to renting—you’re not on the hook for snow removal, for instance. But those services come with a price tag via condo fees. Here’s what they cover:

Property maintenance

Fees go toward basic upkeep for the building’s overall property, such as window washing and snow and garbage removal. They also cover maintenance of the condominium’s common areas, such as the parking garage, hallways, the entrance lobby, elevators and additional amenities like party rooms and saunas. These common areas also have insurance policies covered by condo fees.

Amenities

Condos can appeal to the lifestyles of their target demographic by offering amenities, which can include a concierge, guest suites, fitness studios, co-working spaces, party and game rooms, outdoor patios and barbecue areas.

There’s often a direct correlation, however, between the fun perks a condo provides and condo fee costs. If you want a luxe gym with a full suite of equipment, that price tag will be wrapped into condo fees.

Reserve fund for emergency work

A good condo corporation will keep a healthy reserve fund so it can repair and replace any damaged parts of the building, such as a roof that might need fixing. Think of it like an emergency savings account a homeowner would build to cover maintenance costs on their property.

Utilities

The utilities that a condo covers depends on the specific building, so always double-check this before making a purchase. These utilities may include water services, electricity, heating and cooling systems, and even cable and internet.

What do condo fees not cover?

Unfortunately, your condo fees are not all-inclusive when it comes to your home ownership expenses. Here ars some other bills you’ll need to build into your budget:

Property taxes

Property taxes are not included in your condo fees. That’s because condo corporations charge condo fees, while your municipality charges property taxes. These cover the costs of essential services in your area, such as waste collection, road repair and other city services. 

Condo insurance

While condo fees will cover insurance for your building and its common areas, you’ll need to buy condo insurance—just like home insurance for homeowners – to cover your personal belongings and any improvements you’ve made to your unit.

Insurance can protect you or your visitors from legal fees and medical bills that may stem from incidents that occur in your unit, as well as replacement costs for your items in case of a covered peril. It also offers additional living expenses in case you’re forced to evacuate and need to stay elsewhere, or your building undergoes unexpected damage, requiring repairs.

Related: What if your neighbour causes water damage to your condo?

How much are condo fees and how are they calculated?

Each condo corporation has their own calculations for their maintenance fees. Generally, condo fees are typically calculated as a percentage of the building’s common expenses based on the unit’s size, plus a parking space and locker. Monthly fees can range anywhere from $250 to $2000 per month.

Often, those higher fees can stem from amenities like indoor and outdoor pools, saunas and squash courts. For example, one condo might have a higher maintenance fee that covers a party room, rec room, sauna, a meeting room, tennis court, gym, outdoor pool and car wash. Meanwhile, others offering little more than visitor parking, and a bare-bones gym will likely have much lower building fees.

However, it’s possible to pay high maintenance fees even for buildings that don’t boast tons of amenities. Older buildings may charge high maintenance fees to cover the cost of higher repair costs.

Lastly, buildings that include hydro and electricity will obviously charge higher maintenance fees — but as a resident, you could be saving money by not having to pay these charges separately.

Can condo fees increase? And who decides?

Unfortunately, condo fees aren’t fixed and you can expect them to increase over time to keep up with inflation and property taxes. It’s basically up to the discretion of the building’s management team when to raise them.
When considering whether to purchase a condo, you can ask your realtor to investigate the history of the condo’s maintenance fee changes. If the condo corporation recently imposed a large fee hike after not having changed it for a while, chances are, it could be some time until the next one. Or, if they routinely impose small rate hikes, you can work that into your budget for next year.

Another tip is to find out how proactive your potential management team is about preparing for repairs and emergencies. If they’re always thinking ahead, it’s less likely they’ll jack up the fees each year for unexpected costs.

How to decide if condo fees are worth paying?

For those looking to jump into the real estate market, it’s typically cheaper to buy a condo than a house. However, as condo fees continue to climb, units may no longer be considered the “affordable” alternative they once were.

When comparing the costs of a condo versus a house, think of what you would pay if you were budgeting for home maintenance.

As a homeowner, you’ll be responsible for keeping the property up-to-date and in good repair. Annual maintenance, for instance, will include changing the furnace filter, roof repair, landscaping, updating the water heater and more.

There are a few schools of thought on how to best estimate home maintenance costs, such as saving $1 per square footage of your home or saving 1% of your home’s purchase price annually.

In the latter case, that means if you paid $500,000 for your home, you’d set aside a minimum of around $5,000 per year per maintenance.

In addition to maintenance costs, you should also include lifestyle factors into your expenses: If you plan on making use of that state-of-the-art building gym or want to host barbecues get-togethers on your condo building’s rooftop deck, paying a bit extra for those amenities might offset the costs of a separate gym membership or dinners out.  

Condo fees are a recurring cost that eat into a home’s affordability, but they pay for perks that might help you save money in other areas of your budget, such as entertainment (via game rooms or private theatres) and health and fitness (via gym studios, saunas and squash courts).

Ultimately, they should be calculated as part of your overall housing budget.

Read next: What are the closing costs for a new condo?