Can I afford the costs, and do I want to?

How much are the common fees, and what do I get for them?

The common fees are monthly fees charged by the corporation for the operation of the building, and you pay these in addition to your mortgage payments. They may include any of the following expenses:

professional property management fees and expenses
accounting fees
legal fees
utility costs for common areas and management office
landscape maintenance and snow clearing, and if there is staff
wages for resident superintendent, cleaners, and or concierge

Is the Reserve Fund of the Condo Corporation in good shape?

Ask to see a copy of the latest Reserve Fund Study, and have it read by someone experienced in these matters. We can do this for you as our principal has prepared reserve fund studies for a number of condominium corporations. Every corporation is required to periodically hire a professional engineer to examine the building, and prepare a report. The report advises the corporation how much money they should put aside each year in a reserve fund to cover the predicted cost of repair and replacement of the common elements.

If the corporation has been diligent in following the study recommendations, there should be sufficient money in the reserve fund to carry out major repairs as they are needed, without making a special assessment on the residents to raise the money. A special assessment can be devastating if you are stretching financially to afford the unit.

Under a special assessment you may be required to provide a substantial amount of money to the corporation within a very short time after being notified, often within just 30 days. The amount of money is usually calculated by dividing the cost of the essential repair by your proportion of the total residential component of the building. In plain English, this proportion is the fraction that represents the area of your unit, to the total area of all the units. The amount that you may have to contribute could be several thousand dollars. This is why knowing the soundness of the Reserve Fund is very wise.