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Magnum York Condo Fees

When it comes to purchasing a condominium, condo fees are generally part of the deal. There are many misconceptions when it comes to owning a condo, with many looking at condo fees as an additional expense over owning a single-family home. Here, we provide the 5 things you should know about your condo fees.

The term “condominium fee” refers to a levy paid by every property owner in a condominium complex. These fees are paid in addition to mortgage payments.

1. Why Do I Need To Pay Condo Fees?

Every condo owner is responsible to pay condo fees, which are due every month. They cover necessary expenses for the maintenance of the common areas of the property. This can include lawn care, snow removal, elevator maintenance, garbage disposal, utilities, etc.

Condo fees are used to pay for regular maintenance and upkeep however, a small portion is set aside into a Reserve Fund. These funds are used for major renovations or unexpected maintenance such as a roof replacement.

Money collected for the reserve fund cannot be returned to owners. Any surplus collected stays in the reserve fund. For example, if a condominium corporation repairs the roof but it takes less money from the reserve funds than anticipated, the corporation cannot return the surplus funds to the owners. 

Condo Law for Albertans: https://www.condolawalberta.ca/finances/reserve-fund/

2. Where Do Condo Fees Go?

Magnum York recently held a Community Townhall and this is a question we are asked frequently. If your condo is managed professionally, the property manager will work closely with the Board of Directors to develop an annual budget to ensure the property is taken care of.

Magnum York tries to help the Board find savings wherever possible, for instance, finding better insurance providers, thoroughly reviewing utility contracts, and finding any potential waste.

3. How Are Condo Fees Calculated?

Condo fees can range in the monthly amount. The fees depend on a few factors, including the size of the property, the building style (high-rise, townhouse, mid-rise), and amenities such as gyms, pools, and concierge services.

As mentioned in our Alberta Condo Law 101 For Condo Boards With Roberto Noce webinar, Robert explains that every Condo Corporation in Alberta has 10,000 unit factors that are divided among all the owners. How many unit factors are owned, will depend on the amount of contribution that the owner is responsible for.

Unit factors are disclosed on the unit Title, to determine how many unit factors the owner owns.

5. What Are The Benefits Of Paying Condo Fees?

There are plenty of benefits to condo living such as a sense of community, more amenities, fewer responsibilities (goodbye snow shoveling!), and less maintenance hassle. Paying a fee will help prevent building issues that could decrease property values.

In Alberta, Reserve Fund Studies are required every 5 years. This is a physical inspection of the depreciating property (roof, heating system, windows, balconies, etc.).

There are advantages to having a fund study done every 5 years. In this way, the owners of a condominium corporation are able to be confident in the financial health of the condominium. The study looks at the capital assets of the corporation (the building and all its components). It then breaks down the longevity of each component, and the anticipated cost to maintaining it over 25 years. The reserve fund study creates a budget for maintaining the assets of the condo corp.

https://kahanelaw.com/reserve-fund-condo-corporations-alberta/

4. What Happens If Condo Fees Are Not Paid?

The payment of condo fees is very important as the annual budget of the Corporation counts on all the collected fees. It is essential to the survival of a Corporation. Failure to make payment could result in the following action taken by the Board:

  • Interest can be charged on the unpaid amount.
  • If there is a mortgage on title, the corporation can ask the mortgage to pay the outstanding balance. (note: many banks consider failure to pay condo contributions as an act of default that could result in foreclosure)
  • If the unit is rented, the rent may be required to pay the corporation the undue amount.
  • A caveat can be placed against the property title.
  • Foreclosure can occur to the property.

Are you unsure what the roles of a Property Management Company are vs. The Board of Directors? We break down the roles and responsibilities in our eBook.

Download our free eBook “Condo Roles & Responsibilities” here: introducing.magnumyork.com/condo-roles

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Author

Jessica Davies

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