All about Condo Fees
When you’re ready to purchase a condo, we suggest you that sure read the article The condominium fees seem low and you’re happy to see that! However, your broker tells you to be vigilant and explains what’s at stake when you see low condo fees.
A condo, which is short for “condominium,” is a private residence owned by an individual homeowner or family in a building or community with multiple units or townhouses. Although they are usually part of a larger high-rise building, “detached condominiums” also exist.
What all condos have in common is that they share common areas—such as yards, garages, tennis courts, swimming pools, rec rooms, or gyms—with other units that the condominium owners don’t have to maintain themselves, making home upkeep that much easier.
What Do Condo Fees Cover?
To get a better idea of what you would be paying for, here are the main expenses that condo fees will cover:
- Repairs (including roofs, walls, and floors)
- Managing the property
- Pool cleaning
- Garbage collection
- Water, electricity, and gas
- Access to common spaces and shared utilities and amenities
Be careful if you see low condo fees
When condo buildings have low fees, this can be a bad sign. It can hide, among other things, a deficiency in the contingency fund, a lack of maintenance or a failure to carry out major renovation work. Such negligence increases the risk of larger claims, which can ultimately be very expensive! [Tip: If major renovation work is to be expected but there is not enough money in the contingency fund, the condominium syndicate can charge a special assessment.
What is a contingency fund?
The contingency fund is a sum of money that the condominium builds up through payments by the co-owners, in order to anticipate the financing of certain work in the common areas.
The law requires that the contingency fund be financed by a financial contribution from the co-owners, which cannot be less than 5% of their contributions to the common expenses Finally, the law requires each syndicate of co-owners to establish a contingency fund, according to the estimated cost of major repairs and the cost of replacement of the common portions. It should also be noted that the amounts accumulated belong to the syndicate, and are not reimbursed by the syndicate to the seller upon the sale of his private portion.
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