For more than 30 years, I’ve been helping clients buy and sell property in Ottawa’s central neighbourhoods, and I can remember the days when condo ownership was still a relatively rare thing in our city.
With the condo boom in Ottawa over the last 15 years, we’ve seen buildings spring up across the city, and condo ownership has become more common.
Some buyers are young people who are now able to enter the property market with the lower price of a condominium. In March of 2019, the average sale price of a condo property in Ottawa was $290,181. A house? $480,143.
Empty-nest couples who have owned a traditional detached house in the suburbs are also deciding to downsize and buy an apartment closer to downtown. They like the idea of no longer having to shovel snow or mow a lawn, and they enjoy walking to all the amenities that downtown living has to offer.
Those who are new to condo ownership also have lots of questions, and they’re usually about the recurring monthly fees that go with condo ownership. Buyers want to know what those fees are and what they include.
As I have lived in a condo unit myself, I’m comfortable explaining to clients how condo ownership works and the value that is offered in the monthly fees as many of the fees are the same as those in a stand-alone home except are paid monthly.
As I explain to clients, condo fees are simply another way of paying for the same things you have to pay for when you own a traditional detached house.
When you buy a house, financial advisers recommend that you set aside money regularly so that you have funds when maintenance and repairs come up, for things like roof, window or furnace replacements, landscaping and deck care.
With a condominium, your monthly fees work in a similar way. They pay for upkeep of the common elements that owners share, such as the lobby, elevators, gardens, terraces, garages and, in some buildings, hotel-like amenities such as gyms, pools and party rooms. The fees also pay for insurance of the common areas (in some cases building insurance), fees for staff like the property manager, maintenance of the common areas, such as snow removal and landscaping.
Provincial regulations also require that a portion of the monthly fee go towards what is known as the reserve fund. This is a separate fund intended to pay for replacements and major repairs that arise over time, such as replacing a building’s roof or repairing a parking garage, etc. This ensures that the building is properly maintained and that funds cover future repairs and maintenance as outlined in the engineering report (reserve fund study) prepared specifically for the building or condo development. These reports estimate the dates and costs of major repairs in coming years. Condo fees will be adjusted if necessary to meet these projected costs generally in accordance with the cost of inflation.
A condo building can sometimes encounter unexpected repairs. This can sometimes require imposing a special assessment to owners outside of the regular condo fees, to help pay for them.
But sudden bills can also arise when you own a traditional detached house as well! Like when that furnace you were hoping would last a few more years suddenly gives out. As with a condo, when you address these problems promptly, you are helping to ensure the resale value of your property.
To re-assure buyers of condominiums that the condo has a sound business structure, all prospective buyers will review the finances and operating principles of the condo corporation. For instance, how they have stayed on budget for maintenance items and the structural and esthetic maintenance of the condominium development as well. I recommend finding a lawyer who works often with condo sales, as these lawyers know what to look for.
For instance, condo fees at one building might include heat, hydro, water and even cable television, while others will not include those things. You might also decide to opt for a no-frills building where fees tend to be lower. With no amenities like a pool or gym or a concierge, expenses can be kept lower as well.
If you’d like more information, the Canada Mortgage and Housing Corporation (CMHC) has an excellent guide to condo ownership at https://www.cmhc-schl.gc.ca/en/buying/condominium-buyers-guide
The guide offers clear, easy-to-understand explanations of how condo ownership works and how condo corporations are governed. It includes tips on purchasing condo units.
If you’re interested in buying or selling property in the Ottawa area, I’d love to meet with you and chat about the current Ottawa market and conditions in your neighbourhood.
You can read about me and my team and the services we offer on my website, at www.nancybenson.com, where you can also view my current listings.
Feel free to give me a call, at 613-747-4747.
Nancy Benson operates a full-service office at RE/MAX Hallmark Realty and specializes in unique homes in the most desirable neighbourhoods of Ottawa. Whether you're buying, selling, acquiring an investment or a secondary home, we have a system that will work for you. www.nancybenson.com