When you own a condo, maintenance fees are kind of like death or taxes: they’re an inescapable fact of life. But before you get worked up about all the costs involved in condo ownership, remember that most maintenance fees cover the same costs you’d have if you lived in a house (maintenance, cleaning, landscaping, gym fees, services, utilities) ‒ they’re just divided among all the unit owners and paid monthly.
Maintenance fees are based on a number of things: the square footage of your unit, its placement in the building (higher floors can be more expensive), and the board's budget. Buildings with premium services like a 24/7 concierge or valet parking will cost more.
What your maintenance fees typically pay for
On-site staff
Contracts for property management, security, landscaping, snow removal, elevator maintenance, garbage pickup
Amenities (gym, pool, party room, lobby, rooftop terrace)
Exterior repairs and maintenance
The corporation's property taxes and insurance
Utilities (hydro, gas, water)
Reserve fund to cover bigger expenses
6 things to know before you buy
1. Nobody's making a profit off your fees. Condos are not-for-profit entities and all the money you pay goes towards two things: operating expenses and ensuring there's a healthy reserve fund. They are usually equal to the anticipated expenses set out in the board’s yearly budget, and how stable fees are year-to-year depends on how well the board plans for future costs.
2. The age of the building isn't as important as you think. Standard wisdom states that the older the building, the higher the maintenance fees. But that's not necessarily true: older buildings don't always cost more. If a building is well-run with a realistic budget and a healthy reserve fund that factors in bigger renos like replacing the roof or the heating system, maintenance fees shouldn’t be astronomical.
Toronto average: $0.69 cents a square foot
According to analysts Condo Business Intelligence, average condo fees in Toronto in 2020 were $0.69 per square foot (so for 1000sf, you’d be paying $690 a month). But they can range pretty dramatically. Here’s a quick look at average fees by neighbourhood:
Credit: Condo Business Intelligence
3. Beware of super-low fees. It takes money to run a building properly, so fees that sound too good to be true could mean problems in the future. If it’s a new build, keep in mind that developers will often offer artificially low fees to attract buyers, but they have no contractual obligation to maintain those fees once the building is finished.
If you’re buying a resale condo, low fees can be a warning sign that expenses haven’t been properly budgeted for, or that renos are being put off. Fees could jump up after you buy, or you could end up facing a special assessment, which is where every unit owner is charged a one-time fee (usually a big one) above their usual monthly fees for an expense the reserve fund can’t cover. And even if that doesn’t happen, a building that’s not doing required repairs won’t do your property value any favours.
4. Parking spots also come with maintenance fees. Yup ‒ having a parking spot will add to your condo fees, and so will a storage locker. Scroll down to the Values & Trends data in any listing on condos.ca to see the average parking spot and locker fees.
5. Great amenities doesn’t necessarily mean higher fees. The size of the building can make a big difference here: if there are hundreds of units all contributing to the pool, basketball court or concierge, the cost per unit won’t be as high as it would be in a smaller building. Look at CityPlace: they have some of the most extensive amenities in the city, but the condo fees are pretty close to the Toronto average. That comes from having lots of owners to share the costs.
6. High maintenance fees can impact resale value. When you’re shopping for a condo, the units with the highest fees don’t generally make the list, do they? Less demand makes those units harder to sell. As fees go up above a certain threshold, prices drop, which will affect you when you decide to sell.
Protect your investment
A good real estate lawyer is your best defence. They will review the building’s status certificate (a report card of the condo’s financial health) to determine how much is in the reserve fund, what’s included in your monthly maintenance fees, and see if there have been any special assessments, legal action against the corporation, etc.
Want to see how much a certain building’s fees have gone up over time? Go to any listing on condos.ca and scroll down to the “Historical Avg Maintenance/sqft” section to get helpful information to help you decide.
Got questions about maintenance fees ‒ or anything else condo-related? Talk to a Property.ca expert today and get the info you need to make the right move.