If you’ve just purchased a condo in a brand-new building, the condo fees are a point with which you should concern yourself, especially since they can be calculated incorrectly. Here’s the information you need to know as a co-owner, so that the condo fees for a new building can be calculated fairly and equitably for everyone.

Due to a poor distribution of the budget, which should be divided among the whole building, and a lack of knowledge about this subject, many condominiums find themselves in situations of disputes between co-owners.

The proper division of the common areas

Often, the distribution of the common areas—also known as the condo fees—is calculated by dividing the condo fees by the number of divisions. If the building consists of 10 condos, then this means dividing the fees by 10, so that each condo pays an equal share. Although this may seem fair, this division is inappropriate because it doesn’t take into account the common areas, the restricted-use common areas, and the shares associated with each condo and specified in the declaration of co-ownership. The shares are very important for determining a fair calculation, because they represent all the components of each person’s property.

The proper division of the restricted-use common areas

In some buildings and condominiums, certain common areas are considered as being restricted-use, because they’re exclusively reserved for certain people. For example, a condominium may include parking spaces that aren’t accessible to the owners of the residential condos, but simply to their owners. To determine fair condo fees, the costs associated with these units must therefore be isolated and only divided among the people concerned with their use and maintenance.

The fair and equitable calculation of the monthly condo fees

Once you’ve been able to isolate the restricted-use common areas, such as parking spaces, and determine the annual maintenance costs associated with them, you can calculate each owner’s monthly condo fees as follows:

If your 10-unit condominium has 5 parking spaces with annual maintenance costs of $1,000 and your annual budget is $10,000, then the annual condo fees for the owners who don’t have parking spaces are calculated as follows:

  • $8,000 x shares + $1,000 x 1/10 x 5 (number of parking spaces)

In the case of a new building, to be able to calculate the condo fees, you should have drawn up a provisional budget beforehand—that is, a realistic estimate of the financial requirements of your condominium association—for regular expenses, more occasional expenses, and the contingency fund. The expenses that must appear in your provisional budget are, among others:

  • The building’s maintenance costs: renovations, repairs, elevator maintenance, fire alarm inspections, RBQ registration, snow removal, etc.
  • The building’s operational expenses: power, water, insurance, building administration, building manager, etc.
  • The contingency fund: according to Section 1071 of the Québec Civil Code, which requires condominium associations to estimate their contingency funds (costs for major repairs to the common areas), the amount set aside for these funds must be at least 5% of the provisional budget.
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