Calgary condo owners struggling with rising condo fees — experts say this is what's causing it

Carole Benner doesn't rent. She owns. But the senior is still finding factors outside of her control are hiking up costs and threatening to drive her from the home she loves.

Why? Condo fees.

Calgary's tight rental market has people sleeping in SUVs and searching for new places when their rent jumps unpredictably. But when CBC Calgary asked community members about housing, those paying condo fees said they also feel a squeeze.

Brenner, who is on a fixed income, now pays $555 in condo fees each month — nearly double the cost of what she was paying when she first moved in eight years ago. She knew fees would increase, but she didn't think it would be by this much.

"My monthly income will be entirely taken up with living," said Benner, who lives alone in northwest Calgary. "There's no excess to fall back on for anything. And that's not a very good way when you're at my age."

She's not alone. In CBC Calgary's text messaging community, several people worried about the increasing fees. One owner worried this was the reason their condo isn't selling, and a renter said this is exactly why they've chosen to rent rather than buy.

Several people on condo boards said they feel helpless watching condo fees rise with no end in sight.

When CBC Calgary set out to find out why, board members and industry experts alike say it's due to three main reasons: increasing insurance costs, inflation and the need to put money into reserve funds.

Each condo building is different. But fees typically cover maintenance of the common space, like the lobby, hallways, elevators, shared amenities and outdoor spaces. That can include snow removal and lawn care.

It also covers condo insurance, at least for the part of the building that is owned in common, and sometimes utilities like heat and water. These are often costs that a homeowner or freehold condo owner would also pay, but those property owners normally have individual control over when and how the bills come in.

Condo owners pay these costs as a group.

Insurance premium increases

Rebecca Hewitt, owner of Condo Savvy — a company that reviews condominium documents for potential buyers in Calgary — says 90 per cent of the properties she's reviewed are seeing increases in their insurance premiums, "which obviously played a role in increasing their fees."

"When we have these big weather events, regardless of whether or not they're in Alberta, they do impact premiums. And then in any given property, if there are claims, it has an impact on the premium and therefore condo fees," said Hewitt.

Several community members who texted in blamed insurance rates specifically, and one who was also on her board said the issue was too few companies competing with each other to offer good rates.

Aaron Sutherland, vice-president of the Insurance Bureau of Canada, says condo boards might be feeling the pressure from inflation, expressed as higher insurance rates, because it costs significantly more now to repair damages.

As for competition, he says that's been an issue previously. Severe weather events and large claims caused challenges in the insurance market, particularly for condos. That led to less availability and higher prices.

But since then, Sutherland says, more companies have entered the market. There should be more options now, he says.

"The best thing they could do, those condo corporations, would be to shop around and work with their insurance representative to find the best coverage at the best price."

Increasing utility costs, inflation

When Nicholas Kuhl, an urban planner, took the plunge into ownership this year, he also decided to join his condo board. He says he thought his experience in land development would provide a useful perspective. But really, he joked in an interview, he also just wanted to keep a finger on the pulse of his building's finances.

He rented in Calgary for four years before deciding to buy in Mission because it was cheaper to buy than continue renting his old place.

Now, he pays $340 in condo fees each month; a number he says is lower compared with others because he lives in a smaller building with no elevator and few amenities.

As a board member, he says inflation has been a big contributor to rising condo fees.

"It would be nice to not increase the fees this year, but the reality is everything does cost, you know, six, seven, eight per cent — whatever inflation is — more this year," said Kuhl. 

That includes management fees, waste removal, snow removal and fuel surcharges, he says. And for those that include it in their fees, rising utility costs are increasing condo fees.

Not reflecting those changes today means compounding those expenses for future years, he says.

He is one of the few owners who actually lives in the building, though, and says a big challenge is that renters are often the ones feeling the impact of condo fees — not necessarily the people who own it and are renting it out.

Reserve fund

A reserve fund is like a mandatory community savings plan. It's not much different from an individual homeowner setting aside money for the roof they know needs to be replaced, but in a condo, the board decides how much to contribute.

To figure that out, provincial law says a reserve fund study must be conducted every five years to assess the building and determine the savings plan.

Outside of being a high school teacher and a host mom for international students, Christine Magill is also a condo owner and a board member.

She's trying to help other owners understand that the board is doing what they can to keep those condo fees down — while maintaining a healthy reserve fund — as costs continue to rise.

"We're like pinching pennies. Our condo manager is pulling his hair out trying to get us the best contracts we can and find savings anywhere because we're barely breaking even at the condo fees we're charging."

Some Calgarians could be feeling the impact of reserve funds that were previously mismanaged, she says.

"A lot of times, they don't charge enough for condo fees so they don't build up a proper reserve fund," said Magill.

In turn, if the building needs major repairs, the insufficient reserve fund is all spent on fixing those issues. That means people down the road will have to pay higher condo fees in order to rebuild the reserve fund.

"It's like that delicate dance, right, because you're an owner, too, and you obviously don't want your fees to go up."

What to look out for

Since all condo buildings are different, Hewitt says that when she reviews documents for a condo buyer, there isn't one way to tell if condo fees are reasonable or not.

"I think what people don't recognize is low condo fees don't necessarily mean healthy buildings, and high condo fees don't necessarily mean healthy," she said.

But there are some things to consider, she says, which depends on the property.

She says if it's a small building, there will be fewer units to pay into the common pot and condo fees could be higher. But bigger buildings likely have elevators, which are expensive to maintain and will add to the fees.

Hewitt says shared amenity spaces — like a gym or a pool — will drive up the cost of condo fees, and owners should also consider if utilities are included or paid separately.

Most importantly, she says, people should consider how active the condo board is.

"The biggest thing is for boards to be actively engaged, actively managing, doing all the things that they're supposed to be doing to keep the integrity of the property in the best shape that it can be."

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