Condo fees can change over time and often run through your budget, according to a Globe and Mail video.
Condo fees are the cost per square foot, per month, the video states. What do these fees pay for? The Day-to-day expenses and the reserve funds. The day-to-day expenses will cover regular operations of the condos like legal fees, utilities and running of amenities. The reserve fund is used to pay for the major repairs of the building. A reserve fund study assesses when major elements of the building must be repaired, so the board will decide how much money will be set aside.
Thirdly, there is a special assessment. If the building has an unexpected shortfall, then the condo board by imposing a special assessment unit owners have to pay in proportion to how big their unit is. This can be paid in a lump sum, a series of lump sums installments or a temporary increase in condo fees.
Generally, you should budget for condo fees to increase at least the rate of inflation, if not a little more. If you’re buying a new condo, the sales estimate of the fees may be lower. When buying a resale, have a professional review the reserve fund and the status certificate.