Le 995 Muir.com
Saint-Laurent, Québec

 

THE COSTS OF CONDO MEMBERSHIPS

As an owner of a condo, you must be prepared to pay costs that reflect belonging to a community

Douglas Gray  (101 Streetsmart Condo Buying Tips for Canadians)


 

There are ongoing monthly or annual expenses and potential expenses that you have to plan for and you must factor these in to your purchase decision. The most common expenses are as follows:

 

Mortgage Payments

Unless you paid cash for your unit, you will be making monthly payments for principal, interest and probably taxes.

 

Property taxes

Each individual condominium unit is assessed by the municipality and has to make an annual payment for the property taxes. The common elements have property tax as well, but that tax is covered in your monthly maintenance payments.

 

Maintenance Payments

Maintenance payments or “assessments for common expenses” cover all the operating costs of the common elements and are adjusted accordingly for any increase or decrease in expenses. You are responsible for a portion of the development’s total operating cost. The payments for common expenses are made directly to the condominium corporation and generally cover the following items.

 

Maintenance and Repair of Common Property

This includes costs for maintenance, landscaping, building repairs, recreational facilities, equipment and other expenses.

 

Operating and Service Costs

These include expenses relating to garbage removal, heat, electricity and municipal water supply.

 

Contingency Reserve Fund

This is a fund for unforeseen problems and expenses. This fund is for expenses that have not been included in the annual budgeted expense calculations for the common property and other assets of the condominium corporation. Owners contribute monthly to this fund, on the basis of a portion of the monthly maintenance fee. The condominium legislation in most provinces requires a minimum amount be contributed by owners to the contingency reserve fund.

 

In most cases, you are not entitled to a refund of your contributions to the reserve fund when you sell your unit, or have it calculated on the purchase and sale statement of adjustments.

 

Management Costs

These are the costs associated with hiring private individuals or professional management firms to administer all or part of the daily functions of the condominium development.

 

Condo Corporation Insurance

Condominium legislation requires that the development carry sufficient fire and related insurance to replace the common property in the event of fire or other damage. Condominium corporations generally obtain further insurance to cover other payables and liabilities. The insurance does not cover the damage done to the interior of an individual unit. The cost of condo insurance for the corporation is included in your monthly maintenance fees.

 

Special Assessment

There may be situations in which 75% or more of the condominium members wish to raise funds for special purposes. These funds would not be able to come from the contingency reserve fund or from the regular monthly assessments. Once the decision is made to assess members, you cannot refuse to pay the special assessment if it has been properly approved, even though you might not agree with its purpose.

 

Lease Payments

If you have a leasehold condominium, you will be required to make monthly lease payments in addition to many of the other costs previously outlined.