New condos and increased budgets

[Wooba]

Does anyone know (if possible, links to something concrete) how much a builder is allowed to increase a budget for a newly occupied condo? There has to be a limit to stop builders offering amazing condo fee rates to then jack them up when the building is complete.

 

[Dan_550]

Good question - not sure if you're referring to what's currently going on at 55 Stewart St/552 Wellington St W (Thompson Hotel), but we're currently dealing with this as fee's are skyrocketing out of control since occupancy - well above the advertised amount. Supposedly it's all due to a 'budgeting mistake', which sounds like total BS. Any ideas on how to combat UT?

 

[JayBee]

Doesn't this always happen though? Fees always seem to end up being more once the condo registers. Would love to know if there's some sort of cap that I don't know about. Seems like a lot of residents at 550 Wellington are pretty disappointed with the project... A/C issue, amenities, not being able to use the pool, people being forced to move into half completed units, a lot of broken promises..etc.

 

[simuls]

Although this can be a problem at any condo, a condo/hotel always has extra expenses. The hotel runs at the expense of the condo owners and typically your condo fees will be at least 50% higher than an equivalently outfitted condo only building. Considering most buildings are in the 50c/ft range right now, I wouldn't be surprised if the 550 Wellington, etc. are closer to .75. Get a good board, manage the fees well and keep track of expenses. It'll be very tricky.

 

[Wooba]

Jaybee: I'm talking about the maintainance portion of occupancy fees.. I expect fees to rise after occupancy, but during occupancy I feel it should be what the builder quoted (or at least very close)..
Dan: I'm talking about iLoft which I'm about to move into.. when I purchased in 2006 the fees were listed at $0.39 a sq/ft. At a recent orientation for new owners we were told that the budget was for 2008 and costs have gone up so fees must go up. On top of that there's HST on many things that were not factored in. So we were told a 20% increase plus just under 8% for HST. People who have already moved in are saying on the iLoft Facebook group that fees seem to be around $0.53 sq/ft. One person posted on facebook that their lawyer stated fees can only go up 4% a year. I can't figure out how they came up with that amount that they did.

 

[simuls]

Jaybee: I'm talking about the maintainance portion of occupancy fees.. I expect fees to rise after occupancy, but during occupancy I feel it should be what the builder quoted (or at least very close)..
Dan: I'm talking about iLoft which I'm about to move into.. when I purchased in 2006 the fees were listed at $0.39 a sq/ft. At a recent orientation for new owners we were told that the budget was for 2008 and costs have gone up so fees must go up. On top of that there's HST on many things that were not factored in. So we were told a 20% increase plus just under 8% for HST. People who have already moved in are saying on the iLoft Facebook group that fees seem to be around $0.53 sq/ft. One person posted on facebook that their lawyer stated fees can only go up 4% a year. I can't figure out how they came up with that amount that they did.

You should read your condo documents. Most will indicate how long the budget is in force for and will state whether or not a new budget can be created and/or what yearly increase is allowed. For eg. my latest purchase was in 2006 and they amended the budget documents and unit condo fees in 2009, plus there is an allowance for a 6% increase per year if closing takes place after a certain date. Your documents should have something similar or a disclosure that will give you guidelines regarding this. If it doesn't, then talk to the builder and your lawyer.