Important info about fees in Calgary Downtown Condos from a Property Manager

Ever wonder why condo fees go up and payment for a special assessment gets slipped under the door of Calgary downtown condos? Well so did I!

The other day, I had the opportunity to sit down with Kyle Kalloo of C-Era Property Management to talk about condo management and to fill me in on why condo owners get dinged with this extra expense. Now Calgary luxury condoswhat I found out I thought was important to share with owners of our Calgary downtown condos.

Before buying a new condo, the builder, with financial advisers, goes through a process of determining the right amount for each condo owner to pay in order to maintain the building. This amount referred to as condo contributions or condo fees will remain the same for the first two years – usually.

Within the first two years the condo board must have a 25 year reserve fund study in place to guarantee the maintenance of building long term. If the reserve fund plan indicates that there won’t enough money from the condo fees to support the ongoing maintenance of the building, your condo fees will increase. Expect this increase to be anywhere from 3-6%.

One of the important reasons for having a condo document review on Calgary downtown condos that are for sale is to see if there are any special assessments due. Also note if there have been special assessments paid in the past – this is important too.

You’ve already seen that the condo fees have gone up to give the reserve fund a boost, although there hasn’t been any special assessments. You may be thinking this is a well managed building if no special assessments have been issued to the condo owners. Well, this is more of a red flag than a sigh of relief.

Coming up to a condo building’s ten year anniversary there may be a lot of wear on the building which would require some upgrading. If the condo owners haven’t seen a special assessment in the first ten years, then there will be soon. This is also a way of either giving the reserve fund a boost or of tackling expensive repairs.

Every five years the building gets reevaluated and the requirements for the reserve fund get updated to make sure the building is maintained adequately – this is a supplement to the reserve fund study I mentioned earlier. A condo building built in 2008 would have one 5 year plan in place. Come 2015 (2 years to prepare the study, then the 5 year plan), the building is ready for an updated 5 year plan and may reveal maintenance issues that have come prematurely. Although if the maintenance issues aren’t revealed in the second 5 year plan it sure will in the third one come 2020.

My point of illuminating the extra expenses for the reserve plan issues isn’t to keep you from buying a condo, but to prepare you financially for condo ownership. Although, there is the odd occurrence that the builder established the condo fees correctly from day one.

If you have any questions about reserve funds or condo fees please feel free to contact me or you can connect with me on my Facebook Page where I have discussions on owning, buying and selling your home.

Post comment