London condo owner frustrated after condo fees climbed 36 per cent in less than a year | CBC News

When Bruno Santos bought his three-bedroom condominium in northwest London last October, he wasn’t expecting to see an increase in his condo fees or to have to pay a reserve fund top-up payment. He is now considering selling.

In less than a year, Santos’s monthly condo fees, also known as maintenance fees, increased by over 36 per cent. The fees first went from $399 to $499 a month when he moved in. Then in June, they climbed again to $545.

The latest increase came after the condo corporation conducted its Reserve Fund Study, which is required every three years under the Condominium Act. Reserve funds are needed to pay for maintenance, major repairs, and other expenses the corporation must keep up with.

The review also found the condo corporation’s reserve fund was too low. Board members sent a letter to all 14 units telling homeowners they needed to pay a $5,000 “Special Assessment” fee on Oct. 1 to replenish the reserve fund.

“They didn’t ask any homeowners about it,” said Santos. “It’s not easy for anyone to have $5,000.”

Santos said he asked the board members if there was a payment plan option, but was declined.

“Can I pay in five months $1,000 each month or something like that, they say no. You have to pay $5,000 by October, no matter what happens,” he said.

While the fee was due Oct. 1, Santos said he doesn’t have the money to pay it and will have to take it out of a line of credit. He said his neighbours have also raised concerns and also haven’t paid, “Other homeowners here are not comfortable with the situation.”

The condominium board declined CBC’s request for comment.

Condo fees have increased across the province

Maintenance fees have been increasing across Ontario since the COVID-19 pandemic due to things like inflation, higher insurance premiums, and rising utility and maintenance costs.

“When you do a new reserve fund study, particularly last year and this year, what you thought was going to cover it won’t cover it now because of those increasing costs of materials, labour, everything,” said Kristie Sargeant-Kerr, a real estate lawyer in London, specializing in condominium sales.

“The board has an obligation to make that up and the Condo Act gives you the authority to do that.” 

Sargeant-Kerr said many condo corporations have payment plans in place for homeowners who are faced with large lump sum “special assessment” fees, but it is at their discretion. She explained that all condos are different, but older buildings may require higher fees than newer ones in order to accommodate larger projects such as roof or balcony repairs.

“I typically see the condo fees in the $250 to $400 range for a newer condo or one that’s not too old,” she said. “But some of those older ones that were registered in the 80s or early 90s, some of those are up $800 to $900 a month just because their reserve fund expenses are significant.”

The Condominium Authority of Ontario encourages homeowners and condo boards to maintain open communication and transparency when it comes to budgets and reserve funds, to minimize financial surprises.

“We encourage condo communities to come together and plan for the cost of preserving their condominium,” said Robin Dafoe, CEO of the Condominium Authority of Ontario. “It’s safety and it’s value. You don’t want the assets to be depleted or become unsafe. It’s important that you maintain the property.”

Dafoe also added that if homeowners have concerns or are in financial distress about making payments, they should approach their board to discuss payment plans.

For Bruno Santos, he said the situation has him considering moving out when his mortgage is up for renewal in a few years.

“I don’t want to deal with this kind of situation in the future.”