Why are Toronto condo maintenance fees so much higher than other Canadian cities?

Category: Condos

 

Hi David, 

I’m really curious as to why Toronto condo maintenance fees are so much higher than other Canadian cities.  Take Vancouver for instance, you will find that most maintenance fees are only $290-$350/month for a 1 bedroom condo, even condos built 30 years ago. I’ve purchased a condo in Toronto and the fees are set to 60cents a square foot plus parking, locker, bike rack etc which ads up to about $438/month for less than 600 square feet on a new build. Looking at real estate listings in Vancouver, although some condos are much higher in price their maintenance fees don’t vary quite as widely as ours. Someone said it’s because of our laws mandating that we set aside a larger percentage for the reserve fund. But I have friends in Vancouver who own, who say they also pay into a reserve fund. So I am really wondering what it is that costs so much more to run condos in Toronto than Vancouver that our fees for older buildings sky rocket, and the average price psf seems to much higher.


 

Hi Veronica,

I’ll be honest – I’m not familiar with how Vancouver condos are run.

But seeing as these two markets are in different provinces, and the Condominium Act falls under Provincial legislation, I would think that how the Act is written likely has a major influence on how condos are run.

It also depends on the cost of water, gas, electricity, and labour.  Those are the big four expenditures that condominiums endure.

Most condos here in Toronto see the unit owner responsible for their own electricity, but the common areas are massive in most condos, and the gas and electricity used is substantial.

The labour isn’t just property management and concierge, but also maintenance, cleaning, repairs, lawyers, accountants, and anybody that works with the condominium corporation.

Remember that there’s an inverse relationship between maintenance fees and price, so if you pay $1.00/sqft for fees as opposed to $0.60/sqft, you might get a $200/sqft discount on the purchase price.

If anybody else has something to add here, or has experience investing/owning in Vancouver, please make your voice heard!
David.

4 Comments

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  1. H. Marshall says:

    The main condo costs are utilities—up to 50% of the budget if electricity is included in the fees. Repairs to the building envelop, balconies, window replacements and underground garage are very expensive so building up the Reserves should take approximately 30% of the budget. If the board bought a cable TV package, that can cost more than the management company fees. (Extremely expensive.) Electrical costs in Ontario are brutal.

    Swimming pools and hot tubs are expensive to operate. I can’t understand condos having salt water pools. That salt water will do a lot of damage to the concrete.

    Initial construction defects can be expensive. Kitec plumbing, water leaks in the units & underground garages and HVAC problems may be expensive issues.

    Then there are legal bills. Some boards are suing the builders or love fighting the owners in the courts. Condos with $100,000 a year in legal bills are not unknown. Sometimes they win and get 50-75% of their costs back; sometimes they lose and pay both sides.

  2. Florence says:

    Good question! I’m from Vancouver and owned condos there – I wondered the same thing when I moved here and can share some observations:

    1. Most condos in Vancouver do not have concierges, although some have property managers who live onsite and are paid around $60k/year (I see this in the budgets) along with discounted rent in a unit owned by the strata council (aka Board)

    2. Most condos don’t have air conditioning as the summers are warm but not humid

    3. Common area heating costs are lower since it doesn’t get as cold as Toronto

    In short, interesting to note the differences but nothing we can really do about them.

  3. Tony says:

    Toronto Condo owners pay their own Hydro in newer buildings, a lot of buildings where the maintenance fees are out of whack are usually building where the Board members have fleeced the reserved funds, Property management companies have also been known to fleece the funds and are always having questionable maintenance done on a regular basis.

    If you own a condo in Toronto and not on the board, you are looking to get fleeced even more.

    There are some “professional board members” also where a group of people buy condos, get their “guy” on the board or even certain property management companies and they go to town using the funds for questionable repairs etc.

    It’s really buyer beware when it comes to owning Condos and townhouses in Toronto.

  4. Dan says:

    It’s likely a combination of the “big four” and provincial legislation.
    Vancouver pays about 70% of what Toronto/Ontario does for Hydro so there is a big cost off the top.

    Looking provincially, Ottawa condo fees seem about on par with Toronto fees-whether that is impacted by legislation or just cost of the big four I can’t be entirely certain.

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