If you’re considering purchasing a condo as an investment property or you’re a tenant about to sign a lease, you might be wondering: Who pays the condo fees when the unit is rented?
It’s a common question and the answer comes down to understanding the structure of condo ownership and how leases are typically written in Ontario.
What Are Condo Fees?
Before diving into who pays them, let’s quickly clarify what condo fees (also known as maintenance fees) actually cover. These are monthly payments made by the unit owner to the condominium corporation. The fees contribute to a wide range of services and expenses, such as:
- Building maintenance and repairs
- Landscaping and snow removal
- Security and concierge services (if applicable)
- Common area utilities
- Contributions to the reserve fund (for future repairs and major projects)
- Amenities like gyms, pools and party rooms
These fees are not optional and vary depending on the size of the unit, the amenities offered and the financial health of the condo corporation.
Who Pays the Condo Fees — the Landlord or the Tenant?
In almost all cases, the landlord or unit owner pays the condo fees. This is the default arrangement in Ontario unless explicitly negotiated otherwise in the lease agreement.
Condo fees are tied to ownership, not occupancy. Since the condo corporation deals directly with the registered unit owner, not the tenant, it’s the owner’s responsibility to ensure that the fees are paid on time. Non-payment could result in legal action from the condo board including liens on the property.
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Are Condo Fees Included in Rent?
The landlord will almost certainly factor condo fees into the rent amount. From a business perspective, most landlords set a rental price that covers their expenses, which include:
- Mortgage payments
- Property taxes
- Condo fees
- Insurance
- Potential repairs and vacancy risk
So while tenants may not see a line item for “condo fees” in their lease, they are still effectively paying them in the form of higher rent. However, the landlord remains responsible for making those payments directly to the condo corporation.
Can the Tenant Ever Pay the Condo Fees?
In very rare situations, the lease may be structured to have the tenant pay the condo fees separately. This is uncommon and usually only seen in longer-term corporate leases or special arrangements. If a landlord and tenant agree to this, it must be clearly outlined in the lease agreement.
That said, this isn’t advisable for most rental situations. From a risk perspective, landlords should retain control over this payment to avoid late fees, administrative issues or even liens being placed on the unit due to missed payments.
What About Utilities and Extra Fees?
While condo fees may cover some utilities (e.g., water, heat), others like electricity, internet or cable are often billed directly to the tenant. Some leases include these in the rent; others don’t. It’s essential for both parties to clarify:
- What utilities are included in the rent
- What services are covered by the condo fees
- Who is responsible for each bill
Again, the lease agreement should spell out these responsibilities in writing to avoid any confusion.
Key Lease Agreement Clauses to Watch For
Whether you’re a landlord or tenant, it’s crucial to ensure your lease agreement is clear and specific. The Ontario Standard Lease offers a solid foundation but custom clauses can be added to address condo specific issues.
Look for the following details:
- Is the rent inclusive of condo fees?
- What utilities or amenities are included?
- Who is responsible for paying specific bills?
- Are there any special rules from the condo board that tenants must follow?
Remember, tenants are required to comply with the condo corporation’s rules and by-laws even though they aren’t owners. Landlords should always provide a copy of the condo rules to tenants before they move in.
Searching for more investor-focused resources? Check out these related blogs next!
- Selling a Condo with a Tenant: What You Need to Know
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- Is Buying a House in Ottawa a Good Investment?
Final Thoughts for Investors
If you’re purchasing a condo as a rental property, condo fees are an unavoidable cost of ownership. When evaluating a potential investment, you should:
- Review the condo’s budget and reserve fund status
- Understand exactly what the condo fees cover
- Factor the fees into your rent calculations and ROI projections
While condo fees can sometimes feel like a downside for investors, they also reduce your exposure to certain maintenance responsibilities and capital expenses, especially when the building is well managed.
Whether you’re a landlord looking to rent out your condo or a tenant preparing to sign a lease, understanding who pays for what is essential for a smooth rental experience.
Need help navigating the ins and outs of condo ownership or investing in Ottawa? Let our experienced team guide you through every step! Call 613.909.8100 or reach us by email at info@PilonGroup.com.
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