What are common area maintenance fees?

Common area maintenance fees are similar to city taxes. They are collected from each owner in order for the directors who, like elected officials of our city, must direct a portion of these fees towards maintenance, repairs, replacements, reserve funds, etc, while providing the best level of services demanded by all owners. Each condominium will have different operational fees in order to maintain their particular property.

The amount of the common expenses is based on the yearly budget. The budget will usually include such items as insurance fees, accounting expenses, management fees, snow plow, landscaping, elevator service, etc. Each owner is responsible for a portion of the corporation's total operating costs. In the declaration, it will indicate the proportions, expressed in percentages allocated to each unit. In addition, the declaration should contain a statement specifying the types of common expenses for that particular corporation. Condominium fees can be much higher or lower between neighbouring condominium developments. This may occur in some cases due to condominiums that are providing a much higher level of service to its owners in regards to recreational facilities. This type of project would definitely require much higher fees.

Some of the readers of this column have inquired what the normal procedure is for calculating the amount of the fees paid. The most common formula that I am familiar with in regards to calculating each unit?s entitlement is dividing the number of square feet in an owner's unit by the number of square feet in all the units.

For example, let's assume a condominium property contains 16 condominium units and the total square footage of all the units is 15,680. Let's also assume your individual unit is 784 square feet and the annual cost, according to your budget, to maintain the common areas is $40,000. To calculate the monthly common expense fee by using the above formula would be as follows:

 

1. calculate the unit entitlement (784/15,680= 1/20 share of the common property).

2. calculate the annual share of maintenance costs (1/20 x $40,000=$2,000 per year).

3. calculate the monthly common expenses to cover maintenance costs (1/12 x 2,000=$166.66 per month, based on the above example unit size and maintenance costs).

If your documents define the share to be paid by square footage, then the above formula could be considered. However, if your declaration states otherwise, then according to the Ontario Condominium Act, the board would require a 90 per cent vote of the unit owners to make any changes to the declaration regarding percentage of the common interests or common expenses.

Marilyn Lincoln is a condo manager/volunteer director and author of "The Condominium Self Management Guide" 2nd ed. Send questions to marilyncondoguide@hotmail.com. To order a copy of her book, send $34.95 plus $4.98 shipping and handling to The Condo Guide, 4A-385 Fairway Rd. S. Suite #128, Kitchener, Ontario, N2C, 2N9