Condo and townhome-owners be warned: Your maintenance fees are about to go up. A lot.
Many freehold (ie: not part of a condo board) house-dwellers already experienced a rise in hydro and gas rates, after the Ontario Energy Board announced rising rates as of May 1, 2014 and Enbridge announced a 40% hike in gas prices as of March. As a result, one reader (who owns a single, detached, 3000 square foot bungalow in Toronto) saw their hydro bill increase by 17%, despite only a 6% increase in year-over-year usage. And it’s not going to end anytime soon.
According to reports from Ontario’s Energy Minister, Bob Chiarelli, any homeowner that pays an electricity bill can expect a 42% increase in prices by 2018. Add another 18 years and you’ll be paying 68% more for your hydro.
I wanted to know what I’d end paying for electricity in five short years and found a great interactive tool on the CBC.ca website that let me calculate my 2020 electricity bill, based on my 2014 usage. All I can say: Ouch! (At least I don’t live in PEI.)
So, why should Ontario condo-board owners be worried? Because a significant, prolonged increase in utility costs will need to be recaptured somehow; more than likely this will mean an increase in your monthly maintenance fees.
This will be scary news for almost two-thirds of condo owners. According to a 2012 TD Economics survey, 68% of condo owners had no idea their monthly maintenance fees could increase, while 38% weren’t confident that they could afford a fee increase.
Strange, considering all the media attention that’s focused on rising condo fees. Sure, most of the media attention has been on how developer’s artificially keep maintenance fees low for the first few years, or the focus has been on board mismanagement that led to escalating costs, but the overwhelming reason for maintenance fee increases is an increase in the cost of living.
Don’t believe me? Just ask your nearest condo board member. While wars are currently being waged over how to keep costs low, condo associations can already see the writing on the wall: Rates are about to rise!