Tuesday, April 15, 2014

Thursday, April 3, 2014

How are Maintenance Fees Set?

How are Maintenance Fees Calculated?

Total operating Expenses PLUS a commitment of an additional contribution to Reserve ( that’s what we call  the forced savings account)  

Special assessments are extraordinary items that need to be paid for Once announced. Usually these expenses are Amortized over 3 or 4 years and offer owners a PAY it now price. Once a special Assessment has been declared even selling your unit provides no escape.

Money can be borrowed to make capital repairs and is paid for from the special assessments. The Board of Directors need to pass special By Laws to permit borrowing.

Sample budgets include;    * For discussion purposes only



% of CEF


Common Element Fee

1,500,000


Interest & Other

11,400




1,511,400






Note 
Expenses:



3
Gas
4.8%
29,000

3
Electricity
17.2%
322,600

3
Sewer & Water
5.3%
59,700

3
Intercom
0.1%
2,300

4a
Cleaning Contract
6.7%
125,500

4b
Building - Exterior
1.3%
23,700

4b
Building - Public Area
0.6%
11,900

4b
Building - Flooring/carpet
0.4%
7,900

4c
Plumbing
0.4%
7,400

4c
Venting
0.8%
15,000

4c
Air Conditioning
0.7%
12,300

4c
Boiler/Furnace
0.7%
12,300

4c
Elevator
2.5%
46,000

4c
Fire & Safety
0.8%
15,000

4c
Electrical Repairs
0.1%
2,000

4c
Heat Pump
1.4%
25,700

4c
Recycling System
0.1%
2,000

4d
Grounds - Equipment
0.4%
7,300

4d
Grounds - Landscaping
0.8%
15,000

4d
Grounds - Parking Lot
0.6%
11,000

4d
Grounds - Public Lighting
0.1%
1,500

4d
Grounds - Storm Sewer
0.3%
5,000

4e
Paint - Exterior
0.0%
500

4e
Paint - Public Area
0.2%
3,000

4f
Snow Removal
0.5%
9,500

4g
Garbage Removal
0.7%
13,000

4h
Recreation
0.2%
3,000

4i
Janitorial Supplies
0.1%
2,000

4i
Pest Control
0.1%
1,000

5
Staff Salaries/Benefits
0.0%
0

5
Office Expense
0.3%
5,000

5
Communications
0.3%
5,000

5
Interest and Bank Charges
0.1%
1,500

6
Security
16.6%
311,000

7
Management Fee
5.4%
101,800


Insurance
1.5%
28,300

8
Professional Fees
0.8%
15,000

9
Reverve Fund - Assessements Repair and Replacement
28.0%
500,000








100.71%
1,511,400







Surplus (deficit)

$            69.00






















working subtotals

1,500,000

















Contribution to Reserve Fund is calculated by an inspection of the Building by Professional Engineers. This report is called a Performance Audit. The receipt of this report calculates the Remaining Economic Life of each building component. The result of this, is the Cash Flow Reserve Fund Study which explains when things will need to be replaced as they wear out and what monies should be on hand.

Reserve Fund Studies will be conducted every 5 years in accordance with the Condominium Act.   Condo Act 1998    This is now being updated with the New and Improved condo act that is pending approval.  Details here  

If you are considering a condo; ask questions.  Understand its a lifestyle and community that you are purchasing.

Humber Bay  and Toronto West Condo's?   Love to hear from you.