Living in a condo is convenient and hassle-free, but it comes with a cost – condo assessments. In this guide, we will explain everything you need to know about condo assessments and how they can affect your finances.
Condo corporation’s assessment fees are fees paid by condo owners to the condominium corporation to cover the cost of maintaining and improving the common areas of the building. These fees are calculated based on several factors, including the size and location of your unit, the number of bedrooms and washrooms in your unit, ownership of parking and/or locker space, and the size and quality of shared facilities and services provided by your condo corporation.
There are three types of condo assessments: regular, special, and emergency. Regular Assessments also known as Condo Fees or Maintenance Fees are collected on a regular basis to meet the financial obligations of your corporation. Special Assessments are one-time fees collected for specific projects or repairs that have not been factored into your operating budget and require additional funding. Emergency Assessments are collected in response to unexpected events, such as storm damage or a major mechanical failure.
The operating budget covers all the maintenance costs outside of your unit. Condo assessments are used to maintain and improve the common areas of the building, such as hallways, lobbies, and elevators, pay utilities, contractors such as landscaping, snow removal, cleaning, security, management, and provide for the Reserve Fund. Your condo board is responsible for developing and approving the operating budget for each financial year and making sure that financial obligations of your condo are fully met as required.
The condominium operating budget is calculated based on the total amount of all costs and expenses minus revenues generated by the corporation. The total budget amount is then divided between all units in a Condominium Corporation as per its Declaration, Schedule D which stipulates an exact share for each unit. Units would include suites, parking spots, and locker units.
If you fail to pay your condo assessments, including special assessments, you may face penalties and interest charges. If not paid within a certain time frame (generally 2-3 months), the condominium corporation will have to take legal action to collect the debt called a lien. If a lien is placed on your unit, an owner will face extra legal and administrative charges to discharge the lien.
As a condo owner, you have the right to dispute a condo communitie’s assessment if you believe it is unfair or inaccurate. It is recommended that you still pay a special assessment as required and then dispute it to avoid costs associated with placing a lien on your property.
Condo assessments are an important aspect of condo living that can impact your finances. It is important to understand the different types of assessments, how they are calculated, and what happens if you don’t pay them. As a condo owner, you have the right to dispute an assessment that you believe is unfair or inaccurate. By understanding your rights and responsibilities as a condo owner, you can make informed decisions about your finances and ensure a worry-free lifestyle.
About the Author: CityTowers Property Management Inc. is a leading condominium management company servicing the Greater Toronto Area, Mississauga, Brampton, Hamilton, Oakville, and Burlington for over 15 years.
B.Sc, CCM, CMRAO GENERAL LICENCE HOLDER
COO & Executive Director