Because of the way a condo shares an area with other condos on the property, it follows a different set of rules than if you were to buy a house. Each set of condos has an association that is essentially responsible for maintaining the property and residences, which in turn, requires for condo fees to be paid by the unit owners. These condo fees, which vary from property-to-property, are what allow the association to take care of the maintenance. If you’re in the market for a condo, it’s important to be aware of what the fees are for before you shell out your hard-earned cash. Keep reading to find out what you’re paying for.
Some condos will require a payment of a utilities fee, which covers the monthly cost of water, electric, and gas. Depending on where you live, Internet, phone, and cable may be included in the fee as well, while other places will require you to pay for it on your own. Read up on what’s included before you make arrangements to have anything turned on at your new place.
What is also known as an association fee or maintenance fee, this fee is what is paid to cover the upkeep of the condo’s property. Think of it as the maintenance pool of every condo owner so that no one has to take care of each individual issue on their own. One of the biggest reasons many prefer to live in condos is because of what the maintenance fee covers. The fee will go toward landscaping, window cleaning, use of the parking lot, cleaning of the hallways, insurance for the condo’s property that’s separate from your condo’s interior, electricity for the common areas, concierge service, security, sewer, trash pickup, cleaning of the property, fitness room usage, management, and extras depending on where you live. When you’re reviewing this particular condo fee, make sure to ask how often everything is done. For example, how often does the landscaper come around? How often is the pool cleaned? Is security available 24 hours a day? This is just as important as what you’re paying so you know what you’re getting for your money.
Consider the contingency fee the condo’s emergency fund. Rather than collect a large payment from each condo owner every time something major happens, they collect a little each month and put it in a reserve so it’s there when it’s needed. It’s used for emergencies, such as if the furnace needs to be replaced or the roof needs to be fixed. For some condo associations that is included in the monthly assessments.
Condo fees are determined by comparing the value of the unit to the value of the entire property. Before signing on the dotted line, it’s essential that you read over everything to see what you’re getting for your money and what you’re going to have to pay out of pocket. You don’t want to get a big wake-up call later on if you find out you have to pay separately for a huge expense. Don’t hesitate to ask any questions; it’s your money you’re paying and you have every right to ask.