Budgeting Problems: Why Condo Fees Keep Rising

Every year, the condo manager calculates the next year’s condo fees by adding up all the expenses needed to keep the building running—cleaning, concierge services, window cleaning, HVAC and plumbing, utilities, elevator maintenance, minor repairs, contributions to the Reserve Fund, and more. This total is then divided among the units based on each unit’s share of the property.

In theory, to avoid any condo fee increase, the manager just needs to plan for the same spending as the previous year. Sounds easy, right? But is it possible? Actually, yes. Even when some costs go up, like hydro prices or minimum wage, there are always areas where savings can be found.

The real question is: Is the manager interested in finding those savings? Is the management company focused on cutting costs? Usually not.

Managers are swamped with a million tasks—communicating with owners and tenants, overseeing maintenance and repairs, keeping records, attending board meetings and AGMs, and dealing with emergencies. With all this on their plate, finding ways to save money often takes a back seat. And there's always a convenient excuse: inflation. The budget balloons. Any surplus is seen as good management, and before you know it, fees go up again.

So, how do you break this cycle? Get an independent opinion on your condo corporation's financial situation. A fresh set of eyes might just find those savings that everyone else is too busy to look for.