Comparing condo fees

Many, perhaps most people shopping for a condo think that the lower the fees, the better the deal. I wish it was that simple. Unless you have two identical condos, sitting side-by-side, it can be very misleading to compare the fees between different condo corporations.

A prospective buyer needs to be aware that fees are dependent on:

•	The unit's square footage. The bigger the unit, the higher the fees.
What is included in the fees?
•	Do the fees include your unit's cost of electricity?
•	Do they include your unit's air conditioning & heating costs?
•	Do they include your unit's water usage?
•	Do they include your unit's fan coil & dryer-vent maintenance?
•	Do they include your unit's cable TV package?
You also need to know:
•	What amenities are included?
•	Are the Reserves fully funded? (The Reserve Funds should not include receivables)
•	When was the last time the corporation had a special assessment?
•	Does the corporation follow the recommended major repairs and replacements listed in the Reserve Fund Study?
•	What were the annual fee increases for the previous three or four years?
•	Are the windows cleaned every year? Twice a year?
•	Is the garage swept every spring?
•	Are the fan coils maintained twice a year, once a year or never?
•	Are the hallway carpets shampooed twice a year, yearly or are they cleaned every couple of years or so?

When comparing different buildings you need to keep in mind:

•	Are they the same age? Older condos may need more maintenance.
•	If one condo has window walls and the other conventional windows, then window replacement and maintenance costs will be different.
•	If one building is visually cleaner, has better security and is properly maintained, then expect the fees to be higher.
•	What is the average annual appreciation between the buildings and how long do the units in each condo stay on the market before selling?

Fee increases
If a condo corporation has not increased its fees for the last two or three years, I would be very concerned that the fees are being artificially kept too low. A condo that has lowered its fees, or has fee increases that are below the rate of inflation, needs to be approached with caution.

Fee increases should at least keep up with inflation.

No fee increases

Except in rare situations, it is impossible to run a condo without having regular annual fee increases unless the board cuts maintenance, closes amenities or starves the reserve funds. If Rob Ford couldn't freeze the City of Toronto's fees, even though he says he did, how can a condo board do it? While cutting services, Ford raised taxes. Here is his record: 2011      0% 2012   2.5% 2013   2.0% 2014   2.7%

A warning sign

Here is a review posted on Condo Advisory of a condo near Square One in Mississauga. The "disinterested" reviewer highly recommends this building because the monthly fees have gone up by only $30 in the last ten years.

This "disinterested" reviewer doesn't say that the building maintenance has been ignored for the last ten years, bricks are about to fall off the exterior walls, there are serious water leaks in the underground parking garage, kids run amok through the building playing soccer in the hallways, there are frequent elevator entrapments, roaches are a serious problem and that the board holds an AGM every two or three years.

Special assessments
A few condos figure that high fees hurt property values so they keep the fees artificially low and when a large expense comes up, they have a special assessment.

One condo in Windsor has a history of having annual special assessments as an alternative to increases the monthly fees. A condo in downtown Toronto has had three "one-time" special assessments in the last seven years.

This behaviour can be easily missed by potential buyers.


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