All You Need to Know About Common Element Fees

April 18, 2011

Toronto Condo FeesThe condominium market in Toronto is growing exponentially. More people are moving to the downtown core. Condominium living provides a vibrant lifestyle. If you are new to condo living, you may be in for a few surprises.

When purchasing a condominium, you will sign a legally binding contract. You will have to pay common element fees every month. The amount of condominium fees varies, depending on square footage of your unit. The condo fees will also depend on the number of amenities the building offers.

A condominium may be an apartment building or a townhouse. Condo fees for apartment buildings are usually more expensive than those for a townhouse.

These fees cover the cost of maintaining the condominium building. Some of the costs that may be covered include:

•           Security and maintenance personnel

•           Recreational facilities such as a pool, fitness centre and party room

•          Landscaping

•           Snow removal

•           Guest suites

•           Utilities

•           Building insurance

•           Property management fees

•           Accounting and legal fees

•           Reserve fund contributions

When you purchase a resale condominium, you will need to obtain a status certificate. Your offer should be conditional on reviewing the status certificate. Your real estate agent can order this for you, and there is a fee attached.

A portion of your condominium fees are placed into a reserve fund. This money is used for special assessments and major renovations and repairs.

The condominium board of directors is comprised of owners voted to the board to represent all of the owners. They make decisions regarding the management of the building and the reserve fund.

If there are not sufficient funds in the reserve, you should be wary about purchasing your unit. If crucial repairs are needed or there are emergencies, and the funds are not in reserve, a special assessment will be levied on the owners. This can be a substantial amount of money that may be requested in a lump sum. Depending on the age of the building, a reserve fund study may be conducted, in order to determine future expenses.

Common element fees are also subject to annual increases at the rate of inflation. The condo board can also decide to increase the fees based on projected expenditures.

If you are in areas for your condo fees, a lien can be placed against your property, and if you are in arrears for more than six months, your property may be placed under power of sale.


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