In our virtual AGMs this year, we have noticed a surge in questions related to maintenance fee increases. We believe this upswing might be primarily attributable to the inflationary trends that have driven up budgets over the past year. Along with inflation, property owners have also had to contend with mounting interest and mortgage rates, which have further added to their financial burdens. In light of this, we believe that property managers must be better equipped than ever to address maintenance fee concerns with sound and effective responses.

To assist property managers, we have created this guide with five effective ways to approach answering questions about maintenance fees. The guide is designed to help navigate the often complex and sensitive topic of budget and fee increases.

1. Know how your neighbours are doing

Many condo owners tend to focus on the percentage increase of maintenance fees, without considering how it compares to other similar properties. To gain perspective on this, we recommend reading our article What 36 Condos Tell Us About Condo Fee Increases in 2022. This article will provide insight on how maintenance fees have increased in neighboring condos in recent years. Additionally, by researching the fees of nearby condos on sites like condos.ca, you can compare your own fees to those of your neighbors. By providing owners with this context, they may be more understanding and accepting of any changes to their own maintenance fees.

2. Put your increase in the perspective of inflation

Consumers in Canada are familiar with the impact of inflation on the cost of goods and services. According to the consumer price index , the cost of a basket of consumer goods and services has increased by 5.2% year-over-year as of February 2023. It's important to note that condos have a higher exposure to construction-related costs, which are not reflected in the consumer price index. In fact, the building construction price index has seen a much higher rate of inflation at 18.7% year-over-year in Q3 2022. By contextualizing budget increases with broader inflationary pressures, it can help alleviate concerns of condo owners about their maintenance fee increases.

3. Know what items in your budget have increased

Property managers must be prepared to explain the main factors that have led to an increase in the budget. A budget is complex and requires attention to detail. It is essential that managers are well-versed in the top three expense increases that have contributed to the overall increase in maintenance fees. A small percentage increase in reserve fund allocation costs, for example, may have a greater impact on maintenance fees than a large increase in pest control costs. Therefore, managers should not only be aware of the increase in expenses, but also understand their relative contributions to the overall increase in maintenance fees. This can provide greater transparency for owners, enabling them to focus on the most important factors affecting the budget.

4. Understand why each item in your budget has increased

It's essential to understand not just the amount and specific expenses that have increased, but also the reasons behind those increases. For example, if the reserve fund allocation has increased by 5%, property managers should be able to explain the factors that led to this increase. This could include an increase in the cost of future replacement of major assets, or changes in inflation assumptions for future costs. By being able to provide detailed explanations and supporting data, property managers can demonstrate their credibility and provide owners with a deeper understanding of the reasons for maintenance fee increases. It's important for property managers to be able to defend their budget with clear and quantifiable assumptions that went into its creation.

5. Empathize with your owners

Conversations about finance can be sensitive for homeowners as they often have strong feelings about how their money is used. Property managers can use empathy to help deescalate questions related to maintenance fees. Empathy allows managers to understand and relate to the concerns and frustrations of residents. By showing empathy, managers can communicate in a way that is calm, understanding, and reassuring, which can help to diffuse any tension or frustration the resident may be feeling. To build trust and understanding with residents, we recommend using active listening and reflective responses. This approach can help to deescalate any potentially tense situation.

In conclusion, maintenance fees are a common concern among condo owners and it's important for property managers to be equipped to answer questions about them. The blog offers five ways to approach answering questions about maintenance fees. By providing owners with context and understanding behind the reasons why budgets have increased, property managers can help alleviate concerns and build trust with their residents.