Why multi million dollars’ condos are perfectly maintained collecting just $0.23 – $0.37 per sq. ft./month condo fee but an economy class building is completely destroyed collecting $0.86 per sq. ft. /month condo fee, and having over $9 mln in debts and needing $14 mln for emergency repairs?
And what to do if you feel you do not get condo services you pay for?
In the high-stakes world of condominium living, a puzzling scenario unfolds. Luxury condos with multimillion-dollar price tags thrive on surprisingly low monthly fees of $0.23 to $0.37 per square foot. In stark contrast, more modest buildings struggle under the weight of $0.86 per square foot fees, accruing debts exceeding $9 million and facing urgent repair needs upwards of $14 million. What drives this stark disparity, and how can condo owners navigate the treacherous waters of condo fees to find peace and financial growth?
Unraveling the Mystery
The dichotomy between luxury and economy class condos raises questions beyond luck or the superficial appeal of amenities. It hints at deeper issues like construction quality, management efficiency, and community engagement. Toronto and Montreal serve as prime case studies, revealing how luxury condos maintain their splendor and financial health with minimal fees, while others flounder financially despite higher charges.
A notable example in Toronto showcases a luxury condo maintaining its allure and structural integrity with fees as low as $0.23 per square foot per month. This 100+-year-old building, transformed into condos in 1998, boasts custom-designed spaces with private elevators, expansive rooms, and upscale amenities, all while keeping monthly charges astonishingly low.
CondoBI team made a lot of researches to understand reasons of a big discrepancy in how much each condominium spent on common expenses.We collected a lot of examples of efficient and not efficient condo management cases and we want to publish some cases and show condo owners and directors that after a basic level of a condo fee that allows to provide a basic, mandatory maintenance, mandatory repairs and replacements, safety and a basic comfort, It does not really matter how much condo fees condominium collected, but it DOES matter how efficiently the money spent!
Let’s compare the buildings’ quality of maintenance and market values that have condo fees $0.23 and $0.37 per sq. ft. /month, and $0.86 per sq. ft. /month.
Why there is such different financial situation?
Case Study: Toronto’s Luxury Living
This is one of examples that proved it is possible to collect just $0.23 per SF / month to maintain a luxury incredible condo building, with private and semi-private elevators . The most expensive lofts in the city, 6 Floors, 11 Units building:
Almost 5000 SF of custom designed space featuring the best of everything. Individual elevators into the loft foyer, enormous rooms, fireplaces, custom bars, libraries, tremendous entertaining spaces. Huge bedrooms w/2 walk in closets and spa like ensuite.
Condo fees – just $1631 per month for 4750 SF, it is $0.23 psf/month including 1 parkings spot. So, 6 – floor 100+ years building which is registered as a condo in 1998 year.
Lofts with 3+1 sizeable bedrooms with 3 ensuites, and underground parking space
This State of Art is worth to be shown to the wide public to understand and enjoy watching the quality of building and the life style!
Such condos prices are in a range of $3,800,000 – $8,800,000 for ~ 5000 SF
Based on the information of condos.ca, Condo has:
- security system,
- BBQ,
- visitor parking,
- gym,
- elevators,
- security guards,
- parking,
- hydro and water are included.
Taking into account that according to statistics of 2018, average condo fees in Toronto were ~ 3 times higher than in Montreal we were searching best practice examples in Montreal and we have found a lot of great examples.
Montreal’s Model of Efficiency
Montreal offers its own example of high-end condos achieving financial and operational efficiency.
For a mere $0.37 per square foot per month, residents enjoy luxury amenities and breathtaking views, underlining the possibility of opulence without exorbitant fees in a cold and snow winter:
Luxury Incredible Condominium with spectacular unobstructed views of the river. The property boasts grand proportions, high quality finishings, an inviting open plan, large fenestration3 sizeable bedrooms with ensuites (3+1), 2 private balconies, 3 parking spaces.
Condo fees – just $1037 per month for 2635 SF, it is $0.39 psf/month including 3 parkings spots. So, taking into account one parking spot fee is at least $20/month, net condo fees counted ~ $0.37 per SF/month. 23 – floor building is registered in 2005 year.
Condo has:
- outdoor and
- indoor heated pools,
- jacuzzi,
- 24/7 security,
- games room,
- party room,
- guests’ lounge,
- gym,
- golf imitator,
- water included.
Those are just 2 bright examples that prove it is possible to maintain luxurious condo buildings with just $0.23 – $0.37 psf/month condo fees!
Toronto. The High-Cost Conundrum
Conversely, a Toronto condo collecting $0.86 per square foot per month is mired in debt and disrepair. Despite significant fee increases over three decades, the basic maintenance remains unaddressed, highlighting a systemic failure in management rather than the necessity of high fees.
Key Factors in Financial Failure
The financial demise of some condos can often be traced back to several critical issues:
- Conflicts of interest between management and owners
- Lack of professional management skills
- Disengagement of the condo board from essential repairs and maintenance
- Limited owner influence over management decisions
- Non-transparency in financial dealings
This is one example that proved it is possible to collect $0.86 per SF / month, have over $9 mln in debts for repairs but repairs are not done and the building needs $14 mln for emergency repairs the next year.
Why condo management was not able to provide a basic maintenance?
Do you think the major problem of that condominium was a low condo fee,
as some of the medias are trying to convince us?
Did condo owners need to pay more to prevent those problems?
They paid more and more.
Major factors of condominiums’ financial failure might be:
- a conflict of interest (condo management and owners) that might causes a low or absence of motivation to spend condo owners’ money more efficiently,
- a lack of professional knowledge and skills (financial, engineering and general management) of a condo management team,
- a low interest of condo board to pay a proper attention to the list of repairs, and major replacements and to control the quality and quantity what actually has been repaired and replaced.
- a low opportunity for condo owners to influence condo management (owners are getting together once a year at AGM, they express unhappiness, makie noice with no result). Now, it is possible to discuss all the problems and worries inside of the building through condo-social.ca and ask an advice from owners of another condo building.
- low transparency (quotes from affiliated companies)
Why condo owners was not active? Probably they did not know what to do.
Condo owners feeling shortchanged by their management must take proactive steps. Engaging in community platforms, demanding transparency, and advocating for efficient management practices can turn the tide. The case of 4645 Jane Street serves as a cautionary tale, urging owners to act before their property becomes a financial and emotional drain.
Dear Condo Owners, do not wait until the situation in your condominium became a disaster, as in 4645 Jane street condos.
It is your property, it is your life and it is your choice
to have a PEACE OF MIND or expect a NIGHTMARE
Condo Business Intelligence” has gathered numerous examples of effective condo management. By sharing these best practices, the initiative aims to enlighten condo boards and owners about the potential for efficient, cost-effective management. The choice between enduring a financial nightmare or enjoying peace of mind lies in the hands of the condo community.