Richmond Hill homeowner raises concerns about lack of oversight for condo fees after 9 per cent hike

Initial condo fees set by developers 'typically understated' to encourage potential buyers

Yorkregion.com
Jan. 15, 2021
Sheila Wang

It turns out there are no limitations on increases in Mehrzad Namdari's condominium fees, or anybody else's in Ontario.

The Richmond Hill homeowner found out the hard way after being hit with an unexpected nine per cent hike on his condo fees this year.

Namdari, who lives with his wife and daughter in a condominium at Yonge Street and Weldrick Road, said he was shocked at the increase.

“It’s crazy it happened, when our recreation facilities are closed since (the) pandemic started. I believed when our recreation facilities are closed, management could save lots of money,” Namdari told The Liberal.

The family paid a $764 monthly fee when they moved into the 1,100-square-foot unit in 2016. Now, they pay $910, Namdari said.

"My major issue is not with my own building, but that it happens to everyone in every condo building," he said.

Across Ontario, there have been a growing number of complaints and dissatisfaction from condo owners regarding condo board governance and condo management, Bonnie Lysyk, the province’s auditor general, says in her annual report in 2020.

A total of 47 condo boards, or 73 per cent of 63 surveyed condo boards, experienced significant increases in condo fees in the first two years after the condos were registered, she says.

Namdari said he reached out to Condominium Management Regulatory Authority of Ontario (CMRAO) for help and was told CMRAO does not have the authority to dispute the decision on condo fees made by the condo board of directors.

There is also no limits on condo fee increases under the Condominium Act.

“They (condo boards) have the full authority to increase the condo fee every year and no one can complain about it,” Namdari said.

“You do have a say, but you need to rally your troops. You need to get people on your side and that takes work,” said Romana King, director of content at Zolo, an Ontario-based online real estate marketplace.

The unit holders can vote down the fee increases, King said, that are proposed by the board of directors who run condo corporations on behalf of owners.

“Using inflation is a really good start. If it’s increasing beyond inflation, why? I mean that’s the question that must be answered,” King said, adding a homeowner should request documentation used to justify fee hikes.

The real estate expert pointed out many condo owners faced fee increases in 2021 after an unusual year due to COVID-19.

The pandemic has led to rising costs, contrary to what many expected, King said. While common areas were closed, the costs of upkeep such as heating remained, she noted.

Some maintenance work even required additional time, measures and labour costs, which could have contributed to the increases, she said.

Homeowners themselves need to take time to look into exactly where the proposed fee hikes came from and make informed decisions, King suggested.

“It’s worse for those who live in new condos,” Namdari observed.

Initial condo fees set by developers are “typically understated” to encourage potential buyers, Lysyk says in her report, and often jump significantly shortly after the condo corporation takes over the buildings from developers.

King agrees.

"I do have problems with how condo maintenance fees are first set by developers and then when we get the transfer to the actual owners, suddenly they have to go up because they have to get those realistic costs," she said.

Unlike British Columbia and Alberta where the government can appoint an inspector or investigator to look into potential developer misconduct, Ontario doesn't have such powers, the report indicates.

Lysyk concludes the limited mandates in Ontario don't sufficiently protect condo owners against many issues they may encounter.