Condos are often attractive to buyers, not only because they can be in a more favourable price range than single family homes, they can provide easier access to amenities and a low-maintenance lifestyle.

However, these benefits don’t come without a cost. In addition to your mortgage, you’ll need to plan for the maintenance fees, also known as condo fees. This article will look at what condo fees are, when they can be reassessed, and what they mean for your mortgage, specifically related to an apartment-style condominium building.

What are condo fees?

To put it simply, condo fees are monthly contributions made by unit owners to a condo corporation (the organization that runs the condo building). This money is then pooled together and goes toward funding maintenance and general upkeep of the building. Every condo has a condo board, made up of people from the building, who manage the property on behalf of residents and owners. They’re responsible for making decisions in the best interest of all parties.

While every building is different, the most common costs included in the monthly fees are:

• Utilities—A condo corporation may pay some or all of a building’s utilities. For example, it may pay for water and electricity, but not heat.
• The reserve fund—A portion of condo fees will go toward maintaining the building’s reserve fund, which is essentially a sum of money set aside for unexpected repairs. For example, if the roof or boiler in a building needs to be replaced, the condo board can use some of this cash to pay for it. Before you buy into a building, knowing how much money is in its reserve fund can also help you understand the building’s financial health.
• Common area maintenance—Condo fees can also go toward paying for garbage pick up, snow removal, and the upkeep of common spaces in the building or property including hallways, lobbies, elevators, and the grounds around the building or buildings.
• Amenities—The more amenities your condo building has to offer, the higher your condo fees will usually end up being. Pools, reception services, saunas, shared rooftop patios, and parking all add to the cost of your condo fees, while admittedly offering a lot in return.

The size of the condo building can also be a factor in your overall condo fees. A building with 20 units will likely not have the same fees as a building with 200 units, as the required maintenance and utilities will be different.

Do townhomes have condo fees?

Not all townhomes have condo fees—owning a freehold townhome is the same as owning a freehold single family home. That being said, certain townhome communities will have condo fees as well which can cover gardening, fences, garbage pickup, shared amenities, and other general maintenance fees as laid out by the condo board. When looking at homes with your REALTOR®, they’ll tell you whether or not the townhome is a condominium or freehold.

When can your condo board reassess your fees?

When you’re looking at condos for sale, it’s definitely easy to gravitate towards ones with lower condo fees. However, lower fees could come with a catch. If the fees are too low, the condo corporation may not have enough cash flow to pay for larger repairs which, in turn, may lead to a special assessment. Your REALTOR® can help provide a more clear picture of the building’s history as they know the area well. They can also recommend properties with better track records to help make you feel more comfortable with your choice.

A special assessment is a payment unit owners must make to the condo corporation, on top of their regular monthly condo fees and mortgage payment. The terms around special assessments will vary based on provincial legislation, so it’s always important to understand what your board can and cannot do.

As an example, the Condo Authority of Ontario (CAO)—an organization that aims to improve condominium living by providing services and resources for condo owners, residents, and directors—indicates special assessments can occur for various reasons, but the most common include:

• Unforeseen expenses—A major expense may arise unexpectedly, such as the roof needs to be replaced. The CAO says this might happen during a critical year for the reserve fund, which is when the condominium board has depleted its reserve fund to complete major projects. As a result, the remaining balance is too low to cover the unexpected expenses and the special assessment has to be paid.
• Under-budgeting—A special assessment can also be paid if an expense or major repair ends up costing more than expected.
• Losing a lawsuit—Finally, the CAO says unit owners must “bear any judgment against the condominium,” which means if the condominium can’t pay the judgment from the operating fund, the board must turn to a special assessment to cover the costs.

Do condo fees affect your mortgage?

When you’re looking for a condo, it’s always a good idea to double check your monthly spend—mortgage payment, property tax, insurance, utilities, and condo fees—and ensure you can afford everything before applying with your lender.

In short, Alex Obradovich, a REALTOR® and sales representative with Chestnut Park® Real Estate Limited Brokerage in Toronto, says condo fees can affect your mortgage.

“When applying for a mortgage or a pre-approval, the lender will most definitely account for condo fees when looking at how much debt they are willing to supply to a client,” he explained. “Condo fees are just one of many factors taken into consideration when determining the amount of debt a lender is willing to supply.”

Furthermore, when it comes to condo fees, Obradovich says they may also have an impact on an owner’s condo insurance.

“Not all condo fees are created equal. Each property may have different costs associated with it. Some condo fees may cover some sort of insurance and the type of home insurance policy you may want to secure may change,” he explained. “Conversely, the home insurance may or may not take into consideration what is provided by the condo or maintenance fees.”

If you’re unsure how to interpret what the condo fees represent, you can request for the condo board to share their status certificate with you. This report contains all the details about the current financial state of the condo maintenance corporation, as well as mention any details of the existing size of their reserve fund and if there are any ongoing lawsuits.

Regardless of whether you’re a first-time home buyer or not, it’s all about asking questions and keeping informed. Your REALTOR® can help navigate condo fees, status certificates, and every other aspect of your condo buying journey.

The information above is for informational purposes only and should not be used as investment or financial advice.

Source: https://www.realtor.ca/blog/condo-fees-and-what-they-cover/25935/1362
Photo: pexels.com

For Stephan Gardner, buying the home in Calgary's Greenwood Village didn't feel like settling. 

Buying a mobile home has made Stephan Gardner's life measurably better, especially from a financial perspective.

Gardner lives with his wife and son in Greenwood Village, a mobile home park, in Calgary, Alta.

"I don't feel I settled here," he told CBC's Cost of Living. "We just walked in and we were like, 'This place is amazing."

The family had been renting a home in the city, and feared they would be evicted after it was sold to a new owner. They were paying $2,100 a month rent, plus utilities. That high cost was preventing Gardner from putting money toward his personal debt.

"I know what it's like to have only, like, cans of tuna to feed your kid, you know, and you [don't] eat for two days or three days just to save money," he said.

Skyrocketing housing costs

During their house hunt, Gardner and his wife weren't impressed with the houses and condos available to them. Some seemed like "money pits," he said. But they didn't want to keep renting because it didn't feel like a good financial decision.

Gardner didn't know that any mobile home communities existed in Calgary, until he stumbled across an MLS listing and was impressed by what he saw. 

Pollen, dust, pet dander, mold spores, bacteria, and many pollutants are so small that they float through the air. When people breathe in, touch, or consume these particles, the body recognizes them as foreign invaders and releases histamines. This natural chemical is produced in white blood cells and released into the body triggering allergic reactions such as sneezing, itchy eyes and runny nose. Sometimes, people have a dangerous reaction called anaphylaxis, which can involve swelling of the airways.

If you have a cough, itchy skin/eyes, or a runny nose throughout the year, then you are likely allergic to a substance within your own home. This puts unnecessary stress on your immune system and may sap your energy.

A clean home is essential to health, but how do you know when your home is clean? Common allergens range in size from 0.1 to 5 microns and most of us can’t see anything smaller than 40 microns without the aid of a microscope. For comparison, a typical human hair has a diameter of 70 microns. No wonder there can be a jungle of allergens inside our homes.

How do you reduce allergens?

• First, use a vacuum that has a HEPA filter and follow the manufacturer’s directions to clean or replace the filter.
• Clean your indoor air with a HEPA filter air purifier.
• Carpeting harbours all sorts of allergens, so ideally, replace wall-to-wall carpeting with solid floorings such as wood or vinyl. If that is not an option, vacuum often and steam clean in the summer months when the warm, dry air speeds up the drying process.
• Fabric curtains also attract allergens, which get stirred up each time the drapes are opened and closed. Better options include smooth slat blinds and washable curtains made of non-porous, synthetic fabric.
• Solid wood, plastic, leather, or metal furniture is easy to keep clean compared to upholstered styles; however, consider using washable slipcovers if you like the comfort of plush couches and chairs.

Allergen-specific precautions:

Mold spores

Mold thrives in humid environments such as bathrooms and basements. You can purchase a hygrometer for as little as $20 online or at your local hardware store. According to the Mayo Clinic, the ideal relative humidity is between 30-50% humidity, which means that the air holds between 30-50% of the maximum amount of moisture it can contain. If your indoor air is too humid, be sure to run the bathroom fan when showering and install a dehumidifier, if needed.

Pet dander

Mammals naturally shed tiny flakes of skin. These flakes typically contain proteins secreted by sweat glands and these proteins are what cause allergic reactions in some people. If you love animals and can’t imagine life without them, try washing your pet frequently, keep your dog or cat out of your bedroom, vacuum your home often with a HEPA filter vacuum, and use a HEPA filter air purifier.

Dust mites

This is one of those times we can be thankful we can only see items as small as about 40 microns! Dust mites are frightful pests that live in warm, relatively humid areas such as our beds and pillows and feed off our dead skin cells. Although they do us a service by tidying up after us, many people have allergic reactions to proteins in the dust created by dust mite feces, urine, and their decaying bodies.

To reduce dust mites

• Use airtight covers for your pillows and mattress
• Vacuum your mattress with a HEPA filter vacuum
• Wash your bedding in hot water
• Lower the heat and humidity in your home

Pollen

Trees, grass, and flowers can all release pollen, making spring and summer challenging for allergy sufferers. In addition to using a good quality air purifier, especially in the bedroom, close your windows on days when the pollen count is high. Many weather stations provide daily information about the local pollen concentration.

Allergens are Common

According to the Cleveland Clinic, approximately one in six people suffer from allergies, but it is possible that many more people unknowingly suffer from mild, ongoing reactions to allergens in their homes.

Source: https://www.sutton.com/blog/home-safety/reduce-household-allergens
Photo: pexels.com