For many residents condo fees can be confusing, even frustrating, if they are not fully understood. Here is the basic information you need to know to inform your residents and potential buyers within your community. The first thing to remember is that, unlike rent, condo fees are not a profit source for the building.
Janice Pynn, president of Simerra Property Management, a FirstService residential management firm in Toronto, explains here, “Condo maintenance fees are your percentage share of the costs to run the building as a whole.”
It’s important that residents understand that these fees correspond to the individual bills paid on a home such as maintenance work, window cleaning, snow shovelling, housecleaning, gardeners, building staff and so on. Fees are calculated according to the size of a unit and are recalibrated each year, up or down, according to the building’s annual operating budget.
And, a certain portion is also set aside as part of a “contingency fee,” which every condo must maintain by law. The contingency fund covers any special costs incurred as part of building upkeep, such as a new roof or repairs to heating or plumbing equipment.
Jethro Seymour, a broker listing specialist, explains further, “the default method used to calculate condo maintenance fees in Toronto is a two-step process. First, the percentage of the building owned by a specific suite holder is determined. Next, each suite owner is assessed a monthly fee proportional to the overall cost of running the building. For example, if a specific suite occupies 1 percent of the entire building, that suite owner would be responsible for 1 percent of the overall monthly operational and property maintenance costs.”
Remember that staff and amenities are the most expensive contributors to condo fees. For more information on how to communicate with your residents, accounting integration and bill payments, or even going green in your community, get in touch today.