When buying a condo in Alberta, you’re not just getting a place to call home or earn revenue by renting it out; you’re joining a shared community with unique responsibilities and costs. One relevant financial consideration of condo ownership is the monthly fees to maintain and repair the shared areas and amenities within the complex.
While these fees vary depending on the condo’s age, size, and amenities, most have a shared set of fees essential to keep the complex upkeep and preserve their property value. In this blog, we’ll break down Alberta’s most common condo fees and discuss what each fee typically covers to help you know where your money is going.
How Condo Fees Are Determined?
Annual Budget
Every year, the condo board prepares a budget for the complex to outline all the anticipated expenses the corporation expects to cover annually. By forecasting these costs based on factors like inflation and market pressures, the board can have a good idea of the money needed for everyday items like essential operating expenses, contributions for the reserve fund, amenities maintenance, insurance, and expected costs and contingencies. We’ll review each one below.
Unit Factors
In Alberta, each unit in a condo complex has an assigned “unit factor” that represents a percentage of ownership in the condo corporation, and every corporation has 10,000 unit factors that give a dollar amount per unit factor. The unit factors you own typically depend on your unit’s square footage or market value, and the fees you pay are determined by the number of unit factors you own. So basically, the more space you have in your unit, the more fees you’ll pay. You’ll find out your unit factors in your title.
Location
Condos in larger, high-demand cities and neighbourhoods tend to have higher fees due to the increased demand for perks like easy access to public transportation, proximity to desirable places and overall “premium” appeal.
The Most Common Condo Fees In Alberta
Now that you know where the fee amount you have to pay comes from, let’s take a look at the standard condo fees you’ll find in Alberta:
1 – Maintenance and Operating Expenses
These are the core of the monthly fees and cover the everyday costs of maintaining common areas like hallways, elevators, green areas, and parking. Operating fees also often include regular cleaning of shared spaces, snow removal, and minor repairs.
If you own a condo in a high-end complex with amenities such as pools, gyms, co-working spaces or concierge services, corporations allocate a portion of the fees to keep these areas in good shape. This will also mean that your fees will be higher than the average.
2 – Reserve Fund Contributions
Alberta law requires that condo corporations set up and maintain a reserve fund to cover extensive repairs and replacements in the condominium, such as roof replacements, window repairs, or other significant structural renovations, to ensure the property is well-maintained over the years. Part of your monthly fee goes into this fund, and the exact amount will be based on the reserve fund study that corporations have to run every five years, which consists of inspecting the condo’s depreciating property.
3 – Insurance
Although owners are responsible for insuring their units, condo corporations must have insurance to protect the building and common areas. Part of the condo fees goes to this insurance to help protect the property against perils like fire, water damage, or liability for accidents on the property.
4 – Management
If your condo has a property management company that takes care of the day-to-day administrative and finance tasks, maintenance, and repairs of the complex, the cost of those services is usually part of the condo fees.
Less Common Fees
1 – Utilities
Some condos may include basic utilities like water, heating, or gas in their fees, while others may require owners to pay some or all of the utilities separately. Whether utilities are included or not will depend on the structure of the condo’s budget and the design of the building.
2 – Special Assessments
If the condo needs an unexpected or unbudgeted repair and the reserve funds are insufficient, the corporation can charge owners an extra amount in their monthly fees for a certain period to cover the expenses.
3 – Contingency Fund
Some condos set aside a portion of the fees to have a contingency fund in addition to the mandatory reserve fund. This fund helps the corporation cover minor unforeseen expenses during the year, which may not fit the main budget, such as unexpected out-of-budget repairs, like a leak in a common area, or small-scale enhancements to improve the community.
Condo Fees Are Necessary
Fees are an essential contribution and an inherent aspect of condo ownership to keep the facilities in good shape and to preserve your property’s market value. Now that you understand the types of fees, how they’re structured, and what they cover, you can make informed decisions, avoid misunderstandings down the road, and know where your dollars go and how they’re being used.
