November 14th, 2018
Condominiums are popular options for both investors looking to purchase income property, and renters seeking updated, polished housing options to call home.
Condos bring tenants a range of conveniences and amenities. These condo perks, however, cost a premium to access. Thus, condo fees pay for all the shared amenities in the building and can be mandatory to some degree.
The more shared amenities in need of maintenance – from rooftop terraces, communal work and leisure rooms, to gyms and pools – the more your condo fees are liable to cost.
Residents in condo buildings must pay their condo fees in order to access their share of the building’s amenities. Not every resident will pay the same amount.
Sometimes, your unit size will dictate the size of your condo fee payment each month, with studio owners paying less than two-bedroom owners, for example. Alternatively, some condos will only charge residents a gym fee or pool fee if they actually intend to use the gym or pool, and request access to the particular room.
Mandatory condo fees concern compulsory maintenance for shared spaces used by everyone, including lobbies, elevators and hallways.
Since condos are popular for investors hoping to secure rental properties for their business, some will want to rent out their unit and collect rent before selling it at a profit.
As the property owner, your mortgage should be covered by the tenant’s rent each month, but what about the condo fees? Can this expense be included in the rent, similar to inclusive hydro, or must it be separated?
As the owner of the condo unit, condo fees are technically the landlord’s responsibility. It’s up to the landlord or their property management team to spell out specific rental terms in the lease or rental agreement.
Lease appendixes can specify various terms and conditions, what the landlord is responsible for and similarly, what is the tenant is required to cover.
A landlord can also set the rent at a price that leaves space for average condo fees so they can be covered inclusively through the tenant’s total rent. The landlord may also be able to direct the condo bill to the tenant so they can pay it directly.
At the end of the day, it will come down to what’s specified in the rental agreement.
If condo fees go on unpaid, the condo board can legally file a lien after three back-to-back months of non-payment. A lien is “a right to keep possession of property belonging to another person until a debt owed by that person is discharged”.
At least 10 days before the condo board files the lien, the condo board will send you a written warning detailing the delinquency.
This situation is to be avoided at all costs. The easiest way to mitigate the risk of missed condo fee payments is by having your tenant sign a precise lease agreement that details which party is responsible for paying the condo fee.