First-time condo buyers are sometimes confused by the monthly maintenance fee that condo buildings charge. Combined with property taxes and your mortgage payments, they can add up to a hefty percentage of your total housing costs. But what is a condo maintenance fee and what does it cover? And how does it compare to the costs of owning a house?

Janice Pynn is president of Simerra Property Management, a FirstService residential management firm and the third-largest in Toronto, with interests in over 32,000 units. “Condo maintenance fees are your percentage share of the costs to run the building as a whole,” she explains. “Unlike rent, they are not a profit source for the management; in fact, each building is registered as a non-profit corporation.”

Generally, Pynn explains, these fees correspond to the individual utility bills you pay on a home, along with maintenance work such as window cleaning, snow shovelling, housecleaning, gardeners, and so on. Fees are calculated according to the size of your unit – a two-bedroom’s fees are higher than a studio’s, for instance – and are recalibrated each year, up or down, according to the building’s annual operating budget.

A certain portion is also set aside as part of a “contingency fee,” which every condo must maintain by law. The contingency fund covers any special costs incurred as part of building upkeep, such as a new roof or repairs to heating or plumbing equipment.

The maintenance fees for townhouses within a complex are usually slightly lower. Often townhouses have their utilities separately metered, so these are not included in the fee; but townhouse owners still pay a share for maintenance of common areas, security and other general costs.

Beyond these basics, there’s a wide variation in the features each individual condo building offers, and the fees vary accordingly. One building might offer beefed-up security, concierge service and underground parking; another might have a fully equipped gym or pool with trainers and classes; or you may have access to special perks like a rooftop patio or guest suite. All of these are reflected in the monthly fee, and in some cases are optional.

One last area to consider is a category known as “special assessments.” These are one-time fees for repairs not covered by the contingency fee, and can be substantial, especially with older buildings and conversions; once the bill is paid off, the maintenance fee will drop accordingly.

Kathy Monahan of Forest Hill Real Estate in Toronto says one of the most important things you should do when considering a condo is to ascertain what the monthly maintenance fee covers, so you’re comparing apples with apples when deciding between two buildings. Consider whether the extra features are worth it to you, or conversely, whether your budget can handle paying separately for things that are not included. “One option I always do recommend if it’s offered, however, is a parking space, even if you don’t drive,” she says, “since you can rent it out and earn some income from it.” This is particularly true downtown.

Kathy offers some examples of condos she’s recently sold in the Toronto area, their fees and what the buyers get for them. (It’s important to note that these merely provide an idea of what to expect; your experience, even with the buildings named here, may be different.)

• Ritz Carlton Hotel, Wellington and John Streets: Two-bedroom, $2455/month, hydro extra. Thirty-plus floors. High-end suites with all the perks of a modern hotel, including 24-hour concierge, top-drawer appliances and finishes, and parking.
• TIFF Lightbox, King and John Streets: Starts under $500 for a small studio. Thirty-plus floors. Options include gym and pool facilities with trainers, access to Autoshare rental cars, and a roof deck with Weber barbecue.
• College Street, Little Italy: $795 for a two-bedroom, hydro extra. Seven floors. One of the earliest conversions in the city, a former church. Each unit is unique, but not many extras. It’s worth noting that units are heated electrically, making the monthly hydro a significant consideration.
• Edith Avenue, Yonge and Eglinton: Starts at $502 for a one-bedroom. Five floors. All-inclusive, including hydro and parking; great neighbourhood, especially for singles, but not many extras.

Both Janice and Kathy state that overall, the costs of condo buying, including maintenance fees, often work out to roughly the same as owning a house the same size, location and price. Would you rather have your own garden, or never have to shovel your sidewalk again? “Ultimately,” says Janice, “it’s a lifestyle choice, rather than a financial one.”