Condo Fees In Ontario: What You Should Know

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By <span>Matthew Roberts</span>
By Matthew Roberts

Updated on January 24, 2024

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By <span>Matthew Roberts</span>
By Matthew Roberts

Updated January 24, 2024

Visit author page

3 minute read

Article Contents
Condo Fees In Ontario: What You Should Know

Whether you already own a condo or are looking to invest in one, one of the critical aspects to familiarize yourself with is condo fees. These fees are not just a monthly expense but a crucial part of maintaining the quality and value of your condo community. But what exactly are these fees? Do they cover condo insurance, and how do they impact your life as a condo owner in Ontario?

What Are Condo Fees?

Currently, Ontario has over 825,000 residential condo units, with condos comprising about 55% of the ongoing home construction projects. While the main expense for any condo buyer is either the condo itself or the mortgage, you should remember there shouldn’t be other expenses. Condo or maintenance fees are monthly payments made by condo owners. These fees contribute to the upkeep of common areas and the building’s overall maintenance. Your condo fee, part of the budget, is finalized and issued by the Board of Directors 30 days before the fiscal year starts. This mandatory monthly fee is legally binding and non-negotiable. Consider condo fees as your share in preserving the community assets, from the lobby and elevators to the fitness center and the garden.

How Are Condo Fees Calculated?

The calculation of condo fees in Ontario is quite straightforward. It’s based on your unit’s proportionate share of the common elements. This means the larger your unit, the higher your fee.

To simplify, your condo maintenance fee is calculated by multiplying your community’s total contribution (split into the Operating Fund and Reserve Fund) by your unit’s entitlement share. The condo developer sets this, and it is usually determined by the size of your unit. Then, we’re dividing this by the total entitlement of all units in the community. This figure represents your monthly fee for the upcoming year.

What Do Condo Fees Cover?

Every Condo Board is required to manage two essential funds: the operating fund and the reserve fund. Here is a breakdown of what each of them entails:

  • Operating Fund: This fund is part of the overall budget used for regular maintenance and upkeep of the building. It covers expenses like: 
  • Common area and electrical maintenance 
  • Building insurance
  • Amenities upkeep (like gyms and pools)
  • Concierge and security staff wages
  • Administrative costs (audit/legal fees, bank charges)
  • Utilities (electricity, garbage disposal)
  • Grounds maintenance (landscaping, road repairs, snow removal)
  • Reserve Fund: A portion of your condo fee is contributed to this fund, which is essential for major repairs or emergencies like roof replacements or significant renovations. New developments must allocate 10% of their operating budget to this fund and conduct a reserve study every three years by a qualified engineer. This study determines the necessary funding for future major repairs and replacements, ensuring the long-term health of your community.
What do condo fees cover?

What Do Condo Fees Not Cover?

  • Property Taxes: Your condo fees don’t include property taxes. These are set by your local Ontario municipality, not your Property Management company. For specific property tax information, consult your accountant and check out our article, where we cover everything you need to know about condo property taxes.
  • Personal Property: While condo fees cover insurance and utility fees for common areas like lobbies and elevators, they don’t cover your utility bills or insurance for your personal property. You’ll need separate condo or renters insurance to protect your unit, contents, and personal belongings as an owner or tenant.

Average Condo Fees in Toronto

The average condo fee in Toronto can vary significantly but is usually about $0.64 per square foot. It varies based on factors like the age of the building, amenities offered, and the size of your unit. Researching and understanding these fees before purchasing a condo is essential, as they can impact your monthly budget.

The Increase in Condo Fees

A question that perplexes condo owners is, “How much can condo fees increase in Ontario?” Like many regular expenses, it’s typical and almost certain that your condo maintenance fee will rise annually. Increases depend on various factors, including inflation, unexpected repairs, or enhancements to the building.

For example, in 2020, approximately 73% of surveyed condo boards reported fee hikes between 10% and 30% within the first two years post-registration. Additionally, 75% of condo owners noted fee increases ranging from 10% to 50% in the past five years.

Ontario law requires that any fee increase be reasonable and in line with the Condominium Act. Plus, regular communication with your condo board and attending meetings can provide insights into the financial health of your building and any upcoming changes in fees.

Other Fees for Condo Owners

  • Special Assessments: Occasionally, condo boards may levy special assessments. These are additional charges for unexpected expenses not covered by the reserve fund or regular fees.
  • Occupancy Fees: When purchasing a new condominium, expect to pay occupancy fees, often referred to as “phantom rent,” to the developer. These fees are from when you start living in your unit to when you officially own it (after the unit is registered).
  • Fees for Corporation Costs: Examining the corporation’s annual budget, financial statements, and estoppel or status certificate is crucial. This package includes key legal documents like the declaration, rules, insurance details, reserve fund status, property management contract, and outstanding judgments. While obtaining these documents might incur a fee, it’s a worthwhile investment.
  • Chargebacks: Condo governing documents often include clauses obligating owners to reimburse the condo for specific expenses, damages, or losses, often resulting from the actions of the owner or tenant. This ensures that such costs don’t unfairly burden other owners not responsible for the issue.
  • Liens: A lien represents a creditor’s legal claim on an individual’s property. If unresolved, it allows the creditor to potentially seize the property from the debtor.
Other fees for condo owners

The Bottom Line

Living in a condo in Ontario comes with unique responsibilities, and understanding condo fees is at the forefront. These fees ensure your living environment is well-maintained, safe, and enjoyable. As a condo owner, staying informed and involved in your community’s financial decisions is key to a harmonious condo living experience.

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