
Condo fees and reserve funds are both essential and must be taken into consideration when buying a condominium. This brief guide will help you better understand what these monthly fees are for so that you can make better informed decisions.
Condo fees are mandatory for divided co-ownership, but not for undivided co-ownership.
Undivided co-ownership properties might still require a monthly or annual injection to build up a reserve fund and pay for building maintenance costs.
Here are the main differences between divided and undivided properties:
Undivided
Divided
For a more in-depth look at the differences between divided and undivided co-ownership, read our article: Divided co-ownership and undivided co-ownership: Key differences.
Condo fees (also called co-ownership fees) are billed to the co-owners each month. They are used to:
Your personal contribution is based on the relative value of the portion of the building you own. For example, if the value of your condo is equal to 7% of the value of the building, you’ll pay 7% of the shared expenses.
The amount of condo fees depends on a number of factors, namely:
Yes. If you’ve just found the perfect condo, and the condo fees are among the lowest you’ve seen, be sure to exercise caution.
Condo fees that are too low could be a sign that:
A special assessment is an amount that’s over and above your monthly condo fees. It’s collected to cover additional costs for projects, such as renovations, or to remedy financial issues.
A reserve fund study helps determine the amount that should be in the reserve fund. For peace of mind: Ask to have the study done by an architect, engineer or other building professional.
Good to know: In Quebec, this practice is now mandatory every 5 years.
It’s sometimes better to pay higher condo fees to make sure that your building is well maintained and there is a healthy amount in the reserve fund. For personalized support and budget planning when purchasing a co-ownership property, make an appointment to meet with one of our specialists. We're here to answer your questions.
Ready to buy your dream condo? Read our article: 5-point guide to co-ownership.
Practical tip
You belong to a co ownership association ? As a co-owner, your cash management and financing solutions should be adapted to your situation. That's why the National Bank has designed an advantageous financial program, especially for co ownership association. Discover our services.
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