Condo fees are not as low as you think

A small condominium residential tower in Thornhill (31 units) has low monthly maintenance fees. That should make it an attractive building to buy a unit; correct? Well perhaps not.

The fees are low because the condo has regular annual Special Assessments of about $1,500.00 per unit. New purchasers will not be aware of this because the existing owner will pay it off before listing the unit so it will not show up on the Status Certificate.

For the year 2020, the Reserve Fund was short $155,000.

Below are two excerpts from the 2018 audited Financial Statements.

The Reserve Fund was allowed to drop to $35,798. On paper, it was pumped up to $200,680 by moving $164,882 from the Operating Fund to the Reserves.

The combined Assets went down from $59,568 in 2017 to –$141,112 in 2018.

Not looking good.

Other Matter

We saw this already but is nice that the Auditor let the owners know that not all is above board with their condo’s finances.

Notes:

The auditor also informed the owners that two directors (not named) are being paid by the corporation. One director made $6,712 in 2018 for landscaping work while another was paid $14,455 for cleaning. Good to see that the owners are informed of this.

The monthly fees are too low to pay the normal operating bills so yearly Special Assessments will go on forever.

The Reserves are so low that this condo will get hit with a huge Special Assessment some time in the future. That to is something the owners can bank on.

So few real estate lawyers and Realtors will catch on to this and so they will fail to protect their clients. However, one Realtor did. That is how I got to read this Status Certificate.