Why Are Condo Fees So High in Ottawa?

"Why is this condo fee so high?" might be the question I get most from condo buyers in Ottawa. There's no single answer, because a fee bundles several different costs together, so the mix behind the monthly number is what you should be looking at before you buy.

What's inside a condo fee

A typical fee pays for the building's insurance, the property manager and the upkeep of the common areas, from the hallways and elevators to the roof and the grounds. It also covers utilities for the shared spaces (sometimes for each unit too) and any amenities, like a gym, pool or concierge. The last piece is the reserve fund, which is money set aside for future major repairs. It's usually where the real differences between buildings come from.

Why fees vary so much from building to building

Two condos of a similar size and age in the same neighbourhood can have noticeably different fees. The difference usually comes from the amenities, the health of the reserve fund and whether a big repair like the roof, the elevators or the parking garage is coming up soon. A building with a rooftop terrace, a gym and a concierge will almost always cost more to run than a no-frills mid-rise.

Why a low fee can be a warning sign

It's tempting to rank condos by fee and treat the lowest as the best deal. An unusually low fee on an older building often means the reserve fund is underfunded, though, which makes a special assessment (a surprise lump-sum bill to every owner) more likely down the road. A higher fee that properly funds a healthy reserve is often the safer long-term bet, even though it costs more today.

How to evaluate a condo fee before you buy

Before you commit, I'd go through the status certificate and the reserve fund study with your agent and lawyer, since they tell you far more than the fee on its own. Ask whether any special assessments have happened recently or are being discussed.

When you compare buildings, look at what each fee includes as well as the total. It's also worth asking how much the fee has gone up over the past few years, since a steady, modest increase is normal while a sudden jump is worth understanding.

Is the fee too high?

I find it helps to think of a condo fee as pre-paying for maintenance you'd otherwise have to save for yourself in a freehold home. What you want to find out before you close is whether it's funding what it needs to.

If you're looking at a specific building and want a second opinion on the fee, send it my way.