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Your Alberta Condo Fees Questions Answered!

a condo in alberta which charges fees
A Low-Rise Apartment Style Condo in Alberta

When purchasing a condo property in Alberta, something many of my clients wonder about is condo fees and how they pertain to ownership.

Many Albertans and Canadians from every province may be unfamiliar with condominium properties. This is to be expected – Canada is the second largest country in the world – only behind Russia in terms of size. So many folks find they have lots of space to spread out, and have never had an experience with a condo.

In more popular areas, cities and newer communities however, we often find condominium properties. Condominium means shared domain, a reference to the key aspect of condo ownership. When you own a condo, you not only own your personal unit, but also a share of the common property. Common property could include amenities like pools & gyms, but also includes things like the roof, driveway, green space and hallways.

In this article, let’s cover:

  • What types of Condos are there in Alberta?
  • How are condo fees calculated in Alberta?
  • What do condo fees cover in Alberta?
  • How much can condo fees increase in Alberta?
  • Condo Fee Red Flags!
  • Is it worth paying Condo fees?

As always, feel free to connect with me directly if you have questions on any specific property or listing you’re seeing. I have extensive experience working with Buyers and Sellers on condos, and have been a condo owner and board member myself. No question is too small and I’m here to help!

What Types of Condos are there in Alberta?

When consumers think of condos, they tend to imagine tall apartment-style buildings. While many condos are built in this style, in reality, condominium is really a form of ownership structure. In essence, a condominium is a non-profit corporation or association, created to manage the common property of owners. In Alberta, condos can be:

  • Apartment Style Units
  • Townhouses
  • Full Detached Homes
  • Bare lots (for future building, mobile homes, etc.)
detached home condo in alberta
This stand-alone home is a condo!

How Are Condo Fees Calculated in Alberta?

A big question in buyers minds’ tends to be condo fees and how much they are. I always say that there are two things that contribute to a condo fee: the size of the unit & share of the common property, and what the fee includes. We will cover what they can include below, but how are they calculated for each unit?

Every condo in Alberta, regardless of the size, will divide the common property responsibility by shares or Unit Factor. This number will always be a share of 10,000, regardless of how many units there are. So if the condominium is 4 equal units, each unit would have a Unit Factor of 2500. If the condo had 100 equal units, each unit would have a Unit Factor of 100 (100×100=10,000).

Usually, unit factors will vary between units as they will vary in size. Unit Factors are defined when the condo is initially created. So typically, a larger unit will occupy more space, and also have a larger share of the common property expense. Sometimes parking stalls and storage spaces can be separately titled as their own unit, often having just 1 Unit Factor.

A screenshot from an Alberta Condominium Property Title, showing the Unit Factor.
A screenshot from an Alberta Condominium Property Title, showing the Unit Factor.

What Do Condo Fees Cover in Alberta?

This is an important question on many Buyers minds. Your condo fee can often be your highest cost besides your mortgage on a property. Some people have an incorrect assumption that this is just money for nothing; in reality, the condo fee is not just the current expenses of the common property, but also money saved for future expenses. Another key item can be grouped utilities that are included in a condo fee. This means your condo pays these expenses as a whole, and you simply pay a share – potentially saving costs on things like water/sewer, natural gas, and internet.

Nearly every condo fee will include:

  • Insurance: This is insurance for the building but not your personal property and upgrades. I describe it this way: if a tidal wave came and washed away the building, this insurance would pay to rebuild it to the same standards as it was before. Your contents & personal property would be covered by your own insurance.
  • Professional Management: Many condos are professionally managed. This manager helps the condo budget and collect condo fees, hire contractors, and maintain the common property.
  • Landscaping/Snow Removal: This is almost always an expense for apartment-style and townhome units, where common driveways and greenspace must be kept up.
  • Reserve Fund Contributions: These are contributions to a common reserve fund, as prescribed by the reserve fund study. This is money set aside by owners to pay for future common expenses like a new roof, siding, or other common property repairs as needed.
  • Budgeted Costs for Common Amenities: upkeep and running costs for common amenities like a pool or hot tub, common lighting, electricity and heating for common spaces like lobbies and hallways.

Some Condo fees may also include Utilities for each unit owner, pooled together. This could be natural gas, heat, electricity, water/sewer, and in some cases even Wifi/Cable. Sometimes this makes the most sense as the heating for the property may be from a central system (say a large boiler for a whole building).

How Much Can Condo Fees Increase In Alberta?

There is no defined limit to how much condo fees can increase in Alberta. This goes back to what condo fees are: they are set by the owners of the condominium, as represented by a board of owners, in the interests of the condo. So condo fees won’t just be high because they want to punish owners – the board are owners themselves!

Condo fees rise and fall depending on the common expenses and planned capital expenses of the condominium. In my experience, condo fees can only reach a certain point before they become untenable – say over $1500/month depending on what is included. The fact is no owner will pay an untenable fee, and a massive overnight increase wouldn’t be acceptable.

If the planned increases in expenses can’t be covered by the monthly fees (which create the budget), a special assessment may be required to fund the difference and keep fees at a reasonable level. This is a lump-sum payment each owner must pay to ensure a critical cost is covered. Special assessments aren’t necessarily bad, but they can be unpleasant. I’ve seen assessments as small as $500 and as high as $10,000 in extreme cases.

Condo Fee Red Flags!

When is a condo fee a red flag? In my experience, if the condo fee is high but doesn’t include many additional utilities, it means the board has increased the fee to pay for unfunded upcoming expenses or to catch up on a previous lack of funding.

This is something we have seen in many older buildings from the 70s & 80s. When a building is new, and back in these simpler times, owners would try to keep expenses low and perhaps underfund themselves for maintenance items far in the future (like a new roof in 35 years). As time wears on, inflation can add to the future cost of these items, and less sophisticated reserve fund studies at the time could lead to funding shortfalls. So current owners may find their fees increasing to make up for this.

The other thing that can happen is high, unexpected ongoing costs contributing to high fees. I’ve seen one condo personally that was wrapped up in litigation for many years. The impact of lawyers fees drained their reserve fund, and even after special assessments, the condo fees had to be raised to cover shortfalls. In this case, small units were paying fees in excess of $1000/mo, with only the basic inclusions. Comparable fees should have been in the $300/mo range. There was a chance the condo owners could win the lawsuit and their troubles would disappear, but in the meantime, they had to shoulder these costs.

Is It Worth Paying Condo Fees?

Yes! Of course it is. As long as you are getting value for money, condo fees are a great way to protect your property as an owner. Not only do they include basic costs you would need to pay anyways (insurance, snow removal), but they also include management and reserve fund contributions.

When you own a home that isn’t a condo, it is completely up to you to ensure you are funded for potential future maintenance. In my experience, few owners start saving for their next roof on the day they buy their current one. Key expenses to protect your property can fall by the wayside until they become a problem – when it is often too late.

When your condo is well managed, you have owners and professionals working together to ensure your personal and common property is effectively managed and funded for the future.

Could Condo Ownership be Right for You?

Condo ownership in Alberta can be a very rewarding way to own property. From an entry level condo, to a townhouse, to a mansion in a gated community, there are so many options for condos here. The key thing is finding the right property for your needs, and understanding the condominium before you buy it.

I’ve helped countless families and investors purchase condos, and pride myself on having the answers to the important questions. I’ve owned condos and served on condo boards personally (I was the treasurer!). Including a condominium document review condition and connecting clients with professionals can be a great way to protect Buyers in a condo purchase.

If you have any questions about condos, Alberta, or any listings you’re seeing, don’t be afraid to text, call or email me any time. No question is to small and I’m here to help.