Common element fees
One of the biggest reasons why people hate condo living is having to
pay common element fees. This atitude causes a lot of problems.
Common element fees are your fourth level of taxation and as long as we
had civilization, there have been taxes.
Everyone hates paying condo fees but it is so easy to forget that a
condo corporation needs money to pay for the utility
bills, services and maintenance. It also needs money put aside for
future repairs and replacements.
What the fees
pay for
I believe that people do not fully understand what condo fees pay for.
The fees are made up of two components; the operating account and the
reserve funds. Both are very important.
Operating fund
The board raises the lion’s share of the fees to pay for the
corporation’s operating expenses. The utilities take anywhere from
40-50% of the fees while security, cleaning, management, landscaping
and snow removal, insurance and maintenance take up the remainder.
Paying for these items insures that the elevators work, the garbage is
picked up, your car isn't broken into, homeless aren't sleeping and
urinating in your staircases, the electricity is not cut off and the
snow is cleared; all
the benefits that people expect when they buy a condo.
Reserve funds
This is the corporation’s piggy bank where anywhere from 10 to 30% of
the fees are put aside for future repairs and replacements of all the
expensive equipment and building structure.
The Act demands that the corporation’s reserves are fully funded inline
with the amounts called for in the reserve fund study. The government
insisted in the condo having adequate reserve funding because when the
multi-million dollar repairs come up, the corporation must be able to
pay for them.
So every month, the owners are paying for the corporation’s immediate
needs and also for its future needs.
Shared facilities
If your condo has shared facilities with other condos, then there is
extra fees required to pay your share of these facilities. It is
important to know that shared facilities also have an operating fund
and a reserve fund and the owners are also responsible to pay for both
of those.
One difference, is that the owners do not get to vote for the members
of the
shared facilities board. They are appointed by the boards of each of
the participating corporations.
Most shared facilities are shared by two or more condos but in some
cases shared facilities by be jointly owned by condos, private rental
buildings and even public housing complexes.
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