Be Prepared: Hidden Costs to Consider When Buying a Condo in Brampton

Like in many Ontario cities, the price of single-family homes in Brampton has shot up over the years. Currently, the average price of single-family homes has reached $1.7M which is quite expensive for the average homebuyer.

As the cost of single-family homes increases steadily, there's a housing option that has emerged as an attractive and affordable housing option for buyers – condos for sale Brampton. With an average price of $543K, condos are the best option for buyers to climb onto the property ladder on a budget.

However, before you seal the deal on a condo, you need to be aware of the “hidden expenses” that come with owning a condo. These costs are unique to condos and aren't found in single-family homes. You must know about these condo ownership expenses so you can decide whether the money you're putting in it is worth the investment.

Extra Expenses That Come with Owning a Condo

HOA Fees

When you buy a condo for sale in Brampton, you become a part of the HOA of the condo building. This association is responsible for maintaining the common areas and amenities within the condo complex. Homeowners Association (HOA) fees are regular payments made by condo owners to the HOA.

Purpose of HOA Fees

HOA fees primarily cover the costs associated with maintaining and managing the common areas and amenities of the condo complex. These common areas include –

• Lobbies
• Elevators
• Hallways
• Parking lots
• Landscaping
• Exterior of the building
• Amenities such as pools or gyms

Security, trash removal, and sometimes even utilities for common areas can also be part of the HOA fees.

How HOA Fees are Determined?

The amount of HOA can vary in condos for sale in Brampton and is usually determined by several factors –

• Operating Budget – The HOA makes an annual budget that outlines the projected expenses for the upcoming year. This budget includes the cost of maintenance, repairs, insurance, utilities, and any contracted services (landscaping company, security personnel).
• Reserve Fund – A portion of the HOA fees are allocated to a reserve fund. This fund is used for major repairs or unexpected expenses in the building such as replacing a roof or repairing structural damage.

Benefits of HOA Fees

True, HOA fees bump up your monthly costs but it also offers several benefits to you as a condo owner –

• No Maintenance Worries

The HOA takes care of the repair and maintenance of shared spaces on behalf of you and other condo owners. They hire professionals to maintain the shared spaces so you don't have to worry about scheduling, finding workers, or even doing the work yourself.

• Access to Amenities

Condos for sale in Brampton give residents access to upscale amenities such as pools, gyms, community rooms, and even guest parking. These amenities are expensive to add and maintain individually in a single-family home. Apart from enhancing your lifestyle, these features and amenities increase your property's appeal to future buyers or tenants.

• Increased Property Value

Well-maintained condo units with amenities tend to hold their value better or even appreciate in value. HOA fees contribute to this by keeping the condo building looking good and ensuring repairs are done promptly.

Special Assessment Fees

Apart from the regular monthly HOA fees, condo owners may have to pay an extra expense that arises unexpectedly – special assessment fees. These fees are charged by the HOA to cover unforeseen expenses that exceed the association's reserve funds.

Reasons for Special Assessments

You may have to shoulder the special assessment fees in a condo for sale in Brampton for the following reasons –

• Unexpected Repairs

Let's suppose a major water leak issue or sudden damage happens to the building roof or elevators. It may so happen that the regular condo fees may not be enough to cover these unexpected repair expenses. In such cases, special assessments ensure these unexpected repairs are done promptly to avoid further issues in the condo building.

• Legal Expenses

Legal disputes can arise between the condo association and contractors, outside parties, or even residents. At times, to cover legal fees associated with such situations, HOA imposes a special assessment fee on residents.

• Emergency Situations

Natural disasters or unforeseen events can cause significant damage to the condo for sale in Brampton. Special assessments help cover the costs of repairs and renovations needed after such emergency situations.

Condo Insurance

Condo insurance also known as HO-6 insurance is a policy designed specifically for condo owners. Homeowner insurance covers the entire structure of the house and your belongings inside. On the other hand, condo insurance focuses on your belongings and the interior of your unit. Since the condo insurance covers less, it is cheaper than homeowners insurance.

Coverage Provided Under Condo Insurance

• Dwelling Coverage

This protects the physical structure of your condo for sale in Brampton unit such as fixtures and cabinets. This insurance offers coverage from perils such as fire, windstorm, vandalism, and theft.

• Personal Property Coverage

This insurance coverage reimburses you for personal belongings inside your condo unit such as furniture, electronics, and clothing in case they are damaged or stolen.

• Liability Coverage

This protects you against lawsuits for bodily injury or property damage caused to others while they are in your condo unit.

• Additional Living Expenses

If your condo for sale in Brampton becomes inhabitable because of a covered loss, this coverage helps pay for temporary accommodation and extra living expenses.

Parking and Storage Units

Many condos offer one or more parking spaces per unit. But these parking costs are usually not included in the basic purchase price. The cost of parking spaces in condos can vary depending on location and demand.

This is why before buying a condo, make sure to ask about parking availability and costs. Also, enquire if there are guest parking options available for visitors and if there is a charge you have to pay for it.

Storage units are another extra expense condo owners have to pay. Condos for sale in Brampton may provide storage lockers or rooms for residents to store their belongings that may not fit within their unit.

You Get Value from the Extra Condo Fees You Pay

As you have seen, the additional fees you pay as a condo owner aren't wasted money lining someone else's pockets. They are there to improve your living experience in the condo and make your day-to-day life more convenient.

But don't think that only condo owners need to pay these hidden or extra costs. Similar expenses have to be shouldered by single-family homeowners too such as exterior maintenance costs and homeowners insurance.

This means that whether you're buying a condo or single-family home for sale in Brampton, you need to brace up for extra costs. So, when budgeting for your new home, remember to account for these additional expenses.