What Are Condominium Fees?
A condominium requires each unit owner to pay a certain amount of fees each month. This monthly fee is utilized for any development or maintenance purpose at the condo. First time condo buyers are often unaware of what these condo fees consist of and combined with their property tax and mortgage payments, the overall monthly payment gets quite hefty.
Here we discuss what condo fees are and what they cover.
Condo fees are simply an amount charged monthly by the condo board for the purpose of maintenance – scheduled or unscheduled (like a sudden failure of the heating system).
These fees vary based on the size of property owned by a particular owner. A 1500 square-feet unit will definitely be charged comparatively more than a 1000 square-feet unit, besides other factors such as the view of the unit, the floor it is located on and so forth.
The nature of condo fees is very broad in the sense that they vary depending on various factors – mainly how developed a building is and what facilities it has for its residents.
Some complexes have swimming pools, fitness centres and tennis courts while others do not. In the former case, the maintenance fees will certainly be higher. A number of multi-story developments are equipped with elevators fire control systems and extensive HVAC systems that elevate the condo costs.
All that been said, it is not possible for all condos to have an ‘average’ cost that new condo buyers can keep in mind. However, you should expect to pay the following as a part of the condo fees:
Maintenance fees vary for each condo complexes depending on their size, the facilities and services offered. Here is what you should expect to be included in the maintenance fees:
- Electricity & Water in common areas
- Common area insurance
- Swimming pool maintenance
- Tennis court maintenance
- Garbage disposal
- Other amenities
A certain amount of the monthly payment from an owner may be placed in the condo’s reserve fund. These funds are designed to be used in case non routine actions are required to be taken. These may include:
- Painting the exterior
- Renovating lobby
- Resurfacing parking lots
- Any other non-routine development
If a certain expense cannot be met by the prevailing reserve fund amount, then a special assessment may be charged by all unit owners to help meet the requirement.
An increase in insurance cost can cause the reserve funds to deplete quickly resulting in the condo board charging a special assessment. This problem is widespread in coastal areas where hurricanes are common.
On an average, expect to pay from as little as $10 in inexpensive rural developments to over a $1000 in high-rise apartment complexes in the heart of a city. Some condos charge fees on a quarterly or annual basis to cater for non-routine expenses.
Condominium fees at some complexes may seem overwhelming, but they are calculated according to the requirements of the compound and help in keeping your investment safe by caring for the overall well-being of the owners.