Condo Buying 101. Common Questions about Condo Element Fees. Top rated real estate agent in Toronto
Sunday Sep 20th, 2020
**CHECK OUT THE FULL TRANSCRIPT BELOW**
Are you looking to buy your first condo? 🏡
Toronto based lawyer, Jazz Dhillon, answers the top three most common questions about condo element fees.
Below are the clickable TIMESTAMP links for the video
00:20 - what monthly condo fees are and what they cover
00:55 - why it's important to double-check the status certificate to confirm what the condo fees cover
1:22 - are condo fees in addition to the mortgage payments?
2:04 - what happens if a condo owner wants to sell their condo and the fees are not paid up to date?
2:51 - how do we address concerns from buyers who want to know if condo fees will increase in the near future?
4:01 - contact information for Jazz Dhillon and Karen Law
Full Video Transcript:
Karen: Hey guys, it's Karen from Toronto here. And today we're joined by Jazz, a family lawyer based in Toronto. Today's topic is geared towards individuals who are looking to purchase a condominium. Specifically, we're going to talk about monthly condo fees. And Jazz is going to answer three common questions regarding condo maintenance fees. So Jazz, would you like to tell us what these condo maintenance fees are and what they actually cover?
Jazz: Hey Karen, thank you for having me again. So condo maintenance fees are commonly referred to as common element fees. Typically cover the maintenance for the building, the operation expenses, insurance, it may cover utilities like gas, hydro as well. So it's kind of like the ongoing monthly fee that the condo unit owner would pay once they have purchased the unit.
It's important to check the condo fees against what was in the actual agreement of purchase and sale. Sometimes buyers look at the agreement and say "okay, well condo fees are this", but then when they actually check it against the status certificate there's a different number, so that's why getting a status certificate is so important, just to make sure that the condo fees are what the condo corp says they are.
These fees are also on top of a buyer's mortgage payments. So they're not part of the mortgage payments, they're actually an additional fee. And usually, the first two condo fees or two months of condo fees are contributed to the reserve fund of the condo corp, which I think we will cover in a later video regarding status certificates.
Karen: So condo maintenance fees, they cover you know, our common expenses as you mentioned, perhaps such as the maintenance of any amenities that are in the building like maintaining the gym or cleaning common hallways. And it also covers the usage of certain utilities that are related to that condo unit. Now, what happens if the condo owner decides to sell their condo and they have not paid their maintenance fees up to date?
Jazz: This is part of the status review that a lawyer would do. They would check the status certificate to find out if there's any arrears in the maintenance fees of the previous owner and if there are, those fees should be paid prior to closing by that, by the vendor who is selling the unit. So you don't want to have a new buyer come in with arrears on common fees. That's something that should be taken cared of prior to closing.
Karen: Okay. So just to be clear, all the maintenance fees need to be paid up to the closing date by the current owner.
Jazz: Right. Right.
Karen: Alright. So I know when we work with buyers who are looking to purchase a condo, one of their concerns is how much higher will the maintenance fees increase and if there will even be an increase in maintenance fees over the next year or so. So how do you address their concerns about condo fee increases?
Jazz: Right. So again, this is also a review of the status certificate. The status certificate should outline if there's going to be an increase in the common element fees. Typically if there's going to be an increase in the reserve fund of the condo corp, there's probably an increase in the condo fees as well. But that should be outlined in the status certificate. Some will say "we expect this increase" or "we expect no increase at all." And those are statements made in the certificate itself. So it's important to check that.
Karen: yeah so that's good to know. Everyone who's listening, you can feel reassured that the condo status documents will disclose all the important legal and financial information that a purchaser should be aware of. And if you're looking to purchase a condo in Toronto, feel free to give either of us a call.
Between myself and Jazz, we are here to help you make a well-informed decision in your real estate purchase. Thanks so much Jazz for sharing your knowledge on condo maintenance fees.
Jazz: thank you. Thanks for having me.
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