What is a Condo Common Fee?

What is a Condo Common Fee?

If you’re considering purchasing a condominium, you’ve likely come across the term “condo fees” or “common charges.” But what exactly do these recurring fees cover, and why are they required?

At their core, condo common fees are regular payments made by all condo owners within a particular community or building. Unlike rent paid to a landlord, these fees go into an account that funds the operational expenses and maintenance costs shared throughout the condo complex.

Think of it like a mandatory homeowners association (HOA) membership bundled with your condo ownership rights. Just as single-family homeowners may pay HOA dues, condo fees are the equivalent expense condo owners chip in to preserve the value and upkeep of their shared investment.

In this guide, we’ll explore what these common fees entail and how they get determined. The goal is to help you know what to expect when you get a bill for a condo common fee – and how to protect yourself from unexpected or unreasonable charges.

 

 

What Do Condo Common Fees Cover?

While there can be some variation by complex, condo common fees generally contribute to the same “common” areas, services, and maintenance needs shared across all units and owners. These include:

Exterior Building Maintenance

Condo fees cover cyclical costs, from roof replacements to repainting and repairing outer walls, patios, windows, and any shared building structures. This could also include landscaping and snow removal for the exterior of the building.

Common Area Maintenance

This covers costs associated with keeping shared areas clean, functional, and safe. This could include maintaining elevators, hallways, lobbies, parking garages, gym facilities, and other amenities offered by the complex.

Management Fees

Condo common fees also go towards paying the property management company responsible for overseeing the day-to-day operations of the complex. This includes managing finances, handling maintenance requests, enforcing rules and regulations, and resolving conflicts between owners or tenants.

Utilities

In some cases, condo common fees may cover certain utilities such as water, hea, or electricity for shared areas like hallways or outdoor lighting. Sometimes, a portion of these fees may also go towards paying for bulk services, such as cable or internet, for the entire complex.

Reserve Fund

Condo common fees often include a contribution to the reserve fund, which covers major repairs and replacements of shared property elements such as roofs, elevators, or heating and cooling systems. This fund ensures that there is enough money available in case of unexpected expenses and helps maintain the complex’s overall value.

How Are Condo Common Fees Calculated?

A common misunderstanding about condo common fees is that they are simply divided equally among all unit owners. In reality, these fees are calculated based on a variety of factors, such as the size and location of your unit, the amenities included in the complex, and the overall maintenance costs.

Some complexes may also have different fee structures for different types of units. For example, units with larger square footage or premium views may have higher fees compared to smaller or less desirable units. Some complexes may charge extra fees for exclusive use of certain amenities like parking spaces or storage lockers.

Total Monthly Fee: $250

  1. Maintenance and Repairs: $75
    • Regular maintenance of common areas (e.g., hallways, lobbies)
    • Repairs to the building exterior and shared facilities
  2. Utilities: $50
    • Water and sewage
    • Electricity for common areas (e.g., lighting in hallways)
    • Heating and cooling for common areas
  3. Insurance: $30
    • Building insurance covering common areas and the exterior of the building
  4. Reserve Fund Contribution: $40
    • Contribution to a reserve fund for major repairs and replacements (e.g., roof, elevators)
  5. Landscaping and Snow Removal: $25
    • Maintenance of outdoor areas (e.g., gardens, lawns)
    • Snow removal services in winter
  6. Security: $15
    • Security services (e.g., security personnel, surveillance cameras)
  7. Administrative Costs: $15
    • Management company fees
    • Administrative expenses (e.g., accounting, legal fees)

Annual Budget Allocation

Total Annual Fee: $3,000

  • Maintenance and Repairs: $900
  • Utilities: $600
  • Insurance: $360
  • Reserve Fund Contribution: $480
  • Landscaping and Snow Removal: $300
  • Security: $180
  • Administrative Costs: $180

How Do You Pay Condo Fees?

But how do you actually pay these fees? There are a few different methods that may be used by different condo associations.

Monthly Invoicing

Many condo associations will send out monthly invoices for the condo fees. These may be sent via mail or email, depending on the association’s preference. The invoice typically includes a breakdown of how much is due for each category, such as maintenance, repairs, landscaping, and snow removal.

Automatic Withdrawal

Some condo associations offer automatic withdrawal as a payment option for condo fees. This means that the fees will be automatically deducted from your bank account on a monthly basis. While this method can make it easier to stay on top of payments, it’s important to ensure that you have enough funds in your account each month.

Online Payment

Many condo associations now offer online payment options for their members. This typically involves logging into a secure portal and entering your payment information. This option allows for convenient and timely payments but may also come with a small processing fee.

Lump Sum Payment

Some condo associations may allow a lump sum payment of the entire year’s fees upfront. While this may help with budgeting and avoiding monthly payments, it’s important to consider if you have the financial means to make such a large payment at once.

The Bottom Line

As a condo owner, it is your responsibility to stay informed about the financial aspects of your association. By participating in meetings and discussions and reviewing financial statements, you can have a say in how your fees are allocated and potentially help yourself save a few bucks in the process! 

Remember, being an active member of your condo community goes beyond just living in your unit – it also means being involved in the decision-making processes that affect all residents. Consider your condo common fee an investment in the betterment of your community – and you’ll soon start to see the benefits of a well-run association.

FAQ

Do I have to pay a condo common fee?

Yes, most condo associations require their members to pay a monthly or annual common fee. This helps cover the cost of shared expenses such as maintenance and utilities. Consider it an investment in your community and the upkeep of your property.

What happens if I don’t pay my condo fees?

If you fail to pay your condo fees, your association may take legal action against you. This could result in late fees, penalties, and even jeopardize your property ownership. It’s important to communicate with your association if you face financial difficulties so they can work with you on a solution.

How can I influence what condo fees I am charged?

As a condo association member, you have the right to participate in meetings and discussions about budgeting and setting common fees. It is important to attend these meetings and voice your opinions and concerns. You can also review the association’s financial statements to see where the fees are allocated and suggest more cost-effective solutions.

What if I want to dispute my condo fees?

If you have reason to believe that your condo fees are inaccurate or unreasonable, you can submit a dispute to the association. This will likely involve providing documentation and evidence to support your claim. The association will then review the dispute and make a decision on whether or not to adjust your fees. 

Register for our August 1st webinar on The Importance of an HOA Website.

Register for our August 1st webinar on The Importance of an HOA Website.

Register Today