Understanding Condominium Contributions (ie.Fees)
For many owners, your condominium contributions are an ongoing challenge. Every year, it seems predictable your monthly contribution will go up with outwardly no demonstrable benefit or improvement for the owner. Yet, is this really the case? To better understand your contributions, ask yourself the following questions:
Are they really fees or are they your contribution to the cost of operating and maintaining your unit?
Are the costs being driven up by forces that can’t be controlled?
Perhaps the first step is to recognize they are not fees. If you have previously been a home owner, did you ever consider the cost of insurance, utilities and maintenance as a fee? Probably not. These were the costs associated with owning your home. You always did your best to control them or took the work on yourself to help keep the costs down. But you also recognized and accepted that operation of your home incurred many expenses, the costs were beyond your control. As a property manager, I have often encouraged owners who were concerned about their condominium contributions to ask friends in single family homes to add up their monthly expenses. It is a simple exercise but generally, with the exception of the capital replacement fund and management expenses, the outcome is surprising and the costs are very similar.
Another important point is that your condominium is a legally registered, not for profit corporation. Every year your Board of Directors, who are elected at your Annual General Meeting from among your fellow condominium owners work with your property manager, to review and update your annual operating budget. A major part of that process includes analysis of costs for the previous year and estimates of costs for the coming year. Once the review is completed, a budget which is generally based on a break- even scenario is created. Your monthly contribution is assessed as set out in your bylaws or on the condominium plan.
Please remember that the members of the Board of Directors are owners just like you, incur the same changes in expenses and have to pay their monthly condominium contributions.