Why first-year condo fees usually go up

The maintenance fee quoted in a sales centre comes from the developer's first-year budget, which is a projection made before the building operates. Insurance, utilities, staffing, contract cleaning and elevator maintenance are all estimated.

Once the corporation takes over, the board sets a budget based on real invoices, and the reserve fund study - required within the first year of registration - often shows contributions need to rise.

Increases after the first year are therefore normal rather than a sign of mismanagement. Budget for a step up, and when comparing buildings, look at what the fee includes: heating, cooling, water and sometimes hydro vary widely between projects.