Tuesday, February 7, 2012

Understanding Maintenance Fees Toronto Condos


Lets have a look at and compare what makes the maintenance fees in your building.

First Lets establish a few things,

Your furnace unit consumes electricity; usually through a heat exchange unit in a central part of the condo or maybe you are blessed with two. The heat exchange units take warmth (hot water heated from a boiler) from the coil and disperse it into your unit. The cost of operating the fan blower is yours, the costs of heating the water as to your maintenance fees. The unit is inside your unit and operates from the Common Expenses. The liability for maintenance and annual inspections is yours although most buildings have annual maintenance inspections.

Having a building schedule an annual inspection, cleaning and filter replacement is much cheaper than you going out and contracting someone yourself. (IE $50 per unit includes filter or $285 per visit to book your own HVAC technician) There are savings in mass purchasing power.

What factors will effect the Maintenence Costs in a building?

Vertical Height ( How many floors are occupied)
Number of Units per floor
Services Offered
Number of Elevators
Staffing on Hand for both Security Concierge and Cleaning,
Staff monitoring the Rec Center as Social Recreation Guides.
Two Towers Sharing a Recreation Center
How much technology is in place for Cameras and Security.

Avoidable Additional Costs

We could scrimp on Window Washing, Landscaping, and Garage Sweeping. We could wait till 9 - 5 for the elevator technician ( They charge a premium for after hours to release you. Toronto Fire also charges if it is not an Emergency.) We could turn down the thermostat in the winter to 65 like my Dad did to save money. Turn down the Hot water temp and take shorter showers. These are all municipal services that are billed directly from the City to the building. Has Hydro Electric raised their fees in the last 5 years? By what percentage? Will they continue to do so? Have water rates increased.. Absolutely.

Can we save on garbage removal; Yes, actually most building pay a separate garbage pick up fee both for recycle and garbage. (Tipping Rates) If we dispose of less we would pay less. SO do we want magazines and Yellow Pages delivered to the building? What about Canada Post and Bulk mail advertisers? Is everything online now? Can you opt out?

It may sound great to have a 70,000 square foot indoor gym and social club, A full time Social Co ordinator, Outside Running Track, A Disco on the Top Floor and the Sky deck. All these marvelous upgrades need maintenance that will add to your fees in future years. If your gym is part of two or three individual condo (towers) buildings that are tied by a common Recreation Center It can be very challenging to set rules or make changes unless you have a mandate from all three towers.


Average... Whats Average?
We have been doing an Annual Common Charge Survey of the properties we manage. As you would expect, there is quite a variation in fees. The 2011 survey was done on 248 hi-rise condominiums comprising 52,406 units. The average common charge per unit per month was $606.47, the average suite size in the survey was 1,057 square feet and the average cost per square foot per month was 57.4 cents.
John Oakes President Brookfield
Conclusions

So in reality the tallest most crowded monolithe structure that is stand alone will be the most cost efficient. The buildings with 30 + floors and 18 suites per floor will always surpass the lower (high rize) building that have 6 to 12 floors. The more residents that share your rec center also make this more efficient. Having 12 people in the elevator every time is more efficient.

Lets Examine individual Line Items/ as a percentage of Gross Revenues.
Assuming you are a high rise with a 300 unit population with modern glass and concrete slab construction. (vs Brick Exteriors) and underground parking.

Hydro 9.6 %
Gas 12.5 %
Water 4.8 %
Security 18.7%
Cleaning Main/ 7.5%
Assessment Repairs 21.2%*
Condo Mgmt Fee 6.3%

Total as % Income 80.6%
Contribution to reserve is now recommended at a minimum 15%*

NB* Toronto has in the last few years had the mildest winters in recent history. All of these assumptions (savings) change if the weather turns colder. There was no snow removal expense as there was no snow.

How is life in your building? Tell me about it....


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3 comments:

Rachel4269 said...

Living in Toronto isn't cheap but it's definitely worth the experience. Whether you live in a house or an apartment there will always be maintenance expenses. The key is identifying the ones that you have some control over and doing your best to keep those down.

http://rentstarlight.com/find-an-apartment/ON/Toronto/

Miss Sherlock said...

Hi David,

Is the Brookfield Study mentioned in this article available to the public?

If not, could you post maintenance fees by area.

Thanks, MS

shopTOism said...

Hello Miss Sherlock,

The Brookfield Study was included in an email that I received as a member of the Board of Directors on a Condo Board.

It was in response to our inquiries about average maintenance fees.

Thank you for your interest and comment.

David Pylyp
Living in Toronto