Condo Fees: What They Cover

Living in a condo comes with a wide range of benefits; you get access to fantastic amenities, property maintenance and can rent it out for supplemental income (if your condo board allows you to do so).

However, there's one undeniable downside to buying a condo in Ontario: paying condo unit fees.

If you're thinking about buying a condo in Ontario, you're most likely asking yourself a number of questions like, "what does a condo fee cover?".

Today's post will go over the various condo fees that you'll (most likely) need to cover on a regular basis if you purchase a condo in Ontario.

Continue reading to get started!

What do condo fees cover in Ontario? — An in-depth guide for prospective condo buyers

In Ontario, condo boards are required to use condo fees for two separate funds: the operating fund and the reserve fund.

Both of these funds are used to cover various expenses related to the property, but what exactly do they cover? 

Let's take a look:

What is an operating fund?

A large portion of your condo fees goes toward the operating fund. The operating fund is used to cover a variety of daily, weekly, and monthly expenses related to the operation of the condo and shared spaces.

The types of expenses covered by the operating fund will vary from property to property, but in most cases, this portion of a condo fee includes:

• Upkeep and general maintenance of amenities (gyms, swimming pools, etc.)
• Building insurance for shared spaces
• A variety of general condo maintenance fees and expenses
• General grounds maintenance (snow removal, landscaping, etc.)
• Wages for condo employees (security, concierge, etc.)
• Utilities
• Administration fees

What is a reserve fund?

The other portion of your condos fees goes toward the reserve fund. The reserve fund is used to cover unexpected expenses like emergency renovations and modifications. A common example of when a condo board may need to use the reserve fund is if they need to repair or replace a roof.

New condo developments in Ontario need to allocate 10% of their operating budget to their reserve fund and undergo a reserve study every three years. A reserve study is an in-depth analysis of a condominium that provides the condo board with up-to-date information about the expected cost of significant repairs or renovations.

So what does a condo fee cover? Simply put, your condo fees go towards the operating fund (a fund that covers regular expenses) and the reserve fund (a fund that covers emergency repairs and modifications).

What expenses aren't covered by your condo fees?

Although your condominium fees generally cover a wide range of expenses, you (as the condo owner) are still responsible for a number of other fees.

For instance, your condo unit fees do not cover your property taxes. In certain provinces, including Ontario, property taxes are determined by municipalities. You can speak with your certified public accountant (CPA) for more information.

Additionally, prospective condo buyers should note that condo fees do not cover their individual unit or their personal property. As mentioned earlier, your condo fees go towards the operating fund, which helps pay for building insurance. However, building insurance doesn't cover your unit or the contents of your unit.

So, if you want to financially protect your condo unit from sudden, unexpected events, the best thing that you can do is invest in a quality condo insurance policy.

Condo insurance is similar, yet entirely different from traditional property insurance. Unlike standard home insurance, which covers the entire building, condo insurance protects your condo unit and the contents of your unit, not the entire building. Condo insurance also provides liability coverage for your unit and a variety of common areas, like gyms, parking lots, and foyers. 

So if an unexpected event damages your condo unit or you're responsible for an injury that occurs in your unit or a shared space, you can rely on your condo insurance.

At Surex, several of our condo insurance providers offer policies with "blanket limits" which financially protects you regardless of what happens to your unit or the building. Speak with your Surex insurance advisor to learn more about condo insurance.

Are condo fees required in Ontario?

Unless you have undivided ownership of your condo unit, then yes, you'll need to cover your condo fees on a monthly basis. This means that you need to take potential condo fees into consideration before committing to a unit.

How much are condo fees in Ontario?

Unfortunately, there's no black-and-white answer to this question! Your condo fees are influenced by a number of individualized factors, ranging from the size of your unit to the quality of the amenities. 

But, if you'd like to get a general idea of what you'll need to pay, we can say that condo fees in Ontario can range from as little as $50 per month to as much as $1,000 per month for a high-end unit. 

Be sure to keep this in mind if you're thinking about investing in a condo unit in the near future. If you forget to factor in your monthly condo fees, you may get emotionally invested in a unit only to find out that it's out of your price range!

Do you need to purchase a condo insurance policy in Ontario?

Yes, if you're getting a mortgage for your condo, then your lender will typically require you to invest in a condo insurance policy.

If you need help finding condo insurance quotes online or over the phone, the first thing you should do is reach out to a reputable insurance brokerage like Surex!

You can save as much as 25% when you bundle with your Surex insurance advisor

Finding the best condo insurance quotes may seem like a challenge; however, after you team up with Surex, you'll quickly learn that it's even easier than ever before!

Contact one of our Surex insurance advisors to start comparing quotes in ten minutes or less and to learn how we can help you save up to 25% when you bundle multiple insurance policies with the same provider!