Tuesday, February 24, 2009

Condo versus Freehold Townhouse- what about maintenance fees?

One common question that I see is regarding the maintenance fees on a condo townhouse. Many buyers ask for freehold townhomes, but condo townhomes can have low maintenance fees and there are other benefits too.


I hope this finds you Happy and Healthy!

All the Best!

Mark



This is the question I received from: GR
Subject: RE: townhomes

Thank you for getting back to me.
My only trepidation with condo townhomes is the arbitrary increase in maintenance fees that can happen. What range would you say the low maintenance fees are in?
thanks,
GR
__________________________
This is my answer to her question:
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Hi GR,
I understand your hesitation and have had other purchasers feel the same way. What I have found is that maintenance fees must be voted on by the board of directors and then the owners must ratify any increase. Normally, maintenance fees would only go up by 1 to 5% at about the most.
With the newer complexes they are fixed for the first 3 years and then escalate very slowly. The status certificate is a document that shows current and future budgets and will indicate any potential increase in maintenance fees over the next year and sometimes longer. Just depends on the range of the future budget.
Low maintenance fees would be in the range of about $90 to $175. I would think that higher maintenance fees are in the range of $250 and up. There are many complexes in Mississauga and surrounding areas that have low maintenance fees.
Also, the maintenance fee covers grass cutting, snow shoveling, garbage removal, common area lighting etc. Most important it covers your building insurance. Thus, you require less property insurance as you only need to insure your contents. I would say that you would save about $200 from your insurance premium in a condo townhouse versus a freehold townhouse, maybe more.
We will email you some listings with lower maintenance fees so you can see what you are getting into.
Thank you,
Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

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posted by Mark Argentino
@ Tuesday, February 24, 2009  
2 comments
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2 Comments:

At Friday, March 06, 2009 7:57:00 PM, Blogger NM said...

Hi, My question is whether the maintenace fees on a condo townhome may only seem low at this point due to the builder having very low sales figures in this recession and lowering the fees to boost sales. I'm looking at a wonderful property (new) which has maintenance fees lingering near the 200 dollar range. In your opinion, will this fee take a dramatic jump once the recession recovers or will the increase be very gradual and mostly insignificant over time? Will the range still be from 1 to 5% as you stated above? Please help! Thanks!

 
At Monday, March 09, 2009 10:48:00 PM, Blogger Mark Argentino said...

Hello NM,

Thank you for your question. I would not think the maintenance fee will jump after our recession recovers, the increase will likely be gradual based up the operating expenses of the condo corp, the budget and any unforseen expenses. In my experience, the increases in the first few years after the fixed period are usually very low. Of course every building, complex and corporation are different and increases can vary.

One thing you can do is to run for one of the directors on the board and then you will have more information and impact on future maintenance fee increases due to your position.

All the best,
Mark

 

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