Condominium fees or dues are regular contributions paid by unit owners to their homeowners’ association (HOA). The fees pay for the maintenance and upkeep of the building, its common areas, the services and amenities residents enjoy. The fees also go into the management and administration of the condominium’s operations.
A portion of these fees is allotted for a Reserve Fund that the HOA uses to pay for large, foreseeable expenditures. Examples include major building repairs, renovation, or updating of condo facilities, and the like.
Special Assessments are a type of condo fee collected by the HOA for emergencies or expenditures not covered by the Reserve Fund. For example, a roof replacement that costs more than what was initially budgeted for. These one-time fees can also be the result of poor planning, so condo buyers are usually advised to peruse the financial statements of the HOA.
Unlike single-family homes, common areas in a condominium building such as lobbies, pools, garden, gyms, laundry areas, and the like are collectively owned by the unit owners. Thus, condo fees ensure that each unit owner shares in the maintenance and upkeep of common areas.
The fees also cover facilities and services such as elevators, janitorial services, and garbage collection. Condo fees, in fact, are the counterpart of a regular homeowner’s usual expenses – except for the added convenience of having a HOA do all the chores on behalf of the unit owner.
Failure to pay condo fees results in penalties. These normally range from simple late charges to restrictions of privileges. In more serious cases, consistent refusal or failure to pay condo fees can result in legal action undertaken by the HOA against a unit owner. The condo association may file a lien on the errant unit owner’s property and eventually foreclose on the unit to answer for the uncollected condo fees.
Here are more condo buying tips for new buyers and investors:
- Always factor in condo fees when deciding between two properties.
- Find out how much and how often condo fees are collected. Pick a condo property with amenities and services commensurate to the fees they collect.
- Select a condo with a competent board of directors that manages the property well and takes into consideration the inputs of unit owners. Condo fees are actually calculated and set by the condo association through the board of directors who manage it.
- Participate in assemblies or meetings with the condo owner’s association where issues such as condo fees are usually discussed.
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