When you read about condos, you are warned about “Gestapo” Boards, exorbitant Condo Association Dues, and other similar stuff.
I am a condo broker and in my world every property has Condo Owners’ Association, or COA.
What this really means is that every owner is a member or a mandatory association.
So, is there any truth to all ?
I have been to a lot of Board meetings in a lot of buildings, have read a lot of condo declarations. I live in a condo, so it affects me personally.
These unpaid Board Members are condo (or home) owners like every other owner. Why would they want to overcharge everybody, if they have to pay what everyone pays? Don’t forget that Condo Association is not for profit corporation, so they can’t have profit. Makes no sense? You bet…
How the fees are calculated
There is such thing as budget. Budget lists every expense the Condo Association has to spend. How much would the salary be for the manager and maintenance guys. How much needs to be set aside for common expenses, and so on, and so forth.
In Florida the law requires that Condo Association have the reserves. Mandatory items are: roof, parking, and paint of the building. Everything that can and is calculated. It is not a frivolous act. There were actual expenses for previous years, and next budget is calculated based on last years actual expenses adjusted to next year forecasts. If the cost of labor goes up, your fee will go up. Cost of materials goes up, fees are going up.
It is that simple.
The real problem
The real problem is that some owners, buyers and real estate agents are not informed. This is number one. And problem number two is not being active in the Association. Go to meetings, read Condo docs, participate in discussions, be active. “Gestapo” Board is usually where members do nothing… The Association is what people want it to be within the constraints of the law and the governing documents.
And then you would start understanding a complicated business of the Association. And how it balances between the needs and the costs. Exorbitant costs are often the imagination of uninformed. It is often when we do not understand where the costs come from.
Condos are expensive to maintain?
There is no saving if you compare the cost of maintaining a single-family home and a condominium. Actually, maintaining a home costs more. As it should. After all, condos have maintenance people, who have the schedules they follow. It means preventive maintenance is done when it needs to be done.
Plus, in condos maintenance of common areas costs way less per owner, than in non HOA single family residences. A 200-unit condominium has a roof but maintaining and even replacing it costs per owner less than maintaining or replacing a roof for a house. I mean that cost of replacing 200 roofs for single family homes would cost dramatically more than the cost of replacing a relatively small rood over a 200-unit high-rise.
You have 2 garage doors in condos, and while they are more expensive than the garage doors in houses, fixing 200 inexpensive garage doors in houses would cost times and times more than expensive doors in a high-rise. And so on, and so forth.
The reason many people say houses do not cost as much as condos in maintenance is for two reasons:
1. You do some of your home maintenance yourself. You may be cutting the grass, taking care of your trees, paint your house yourself, and do other things that needs to be done.
2. You simply skip on important maintenance. You do not paint your house every so many years, you do not check for hair cracks under windows, and do not fix them, and water slowly and surely get in the wall, and then 10 years later you have to fix this and this. And this is what happens to overwhelming majority of homes.
So, this is a little clarification about the Associations.