My OperaFlagstaff condos Owner Discouraged About Condominium Fee Increase
Sunday, May 30, 2010 4:39:57 AM
P.F. (Pennsylvania) asks: "Kay, I'm on a fixed income and my condo fees keep going up. Pretty soon, living here will be unaffordable!"
Dear P.F.: Changing fees concern owners in every condominium association. Fees normally go up, not down, and they may change regularly. The fee at the time of purchase is usually what people look at. So, an unknown fact is that the amount will probably increase from year to year.
Why? It could be any one or more of these reasons:
When the developer was in control, fees may have been low in order to sell the units quickly.
The association will have to pay for services that the developer performed at no charge.
A big repair job needed done and there wasn't enough money to cover it.
The budget was insufficient.
Maintenance, repairs, and replacement costs of materials for the condominium's property increased.
Costs of services such as trash removal, landscaping, and snow removal increased.
Fees for the condo association's attorney, accountant and management company, to name a few, increased.
Can condo fee increases be eliminated?
Depending on the fluctuation of expenses and inflation, probably not. Remember that these same expenses would change if you were in a single-family home.
Can the increases in condominium fees be minimized?
The condominium board of directors can research costs of materials, services, and professional fees in advance of planning the budget for the next year.
The condominium management company and/or board should regularly inspect the property to stay on top of aging of the buildings, grounds, and recreational facilities.
The condominium board and/or management company should schedule routine maintenance programs in order to increase the association's life expectancy. These programs will also reduce surprises!
When an expensive item needs repair or replacement, the condo's board or management company should put the item out for competitive bidding.
A Reserve Study by a professional company should be obtained by the board of directors. Costs will be shown in this report for repairs/replacements for the various parts of the property over the next 10-20 years. Charts for yearly budgeting will be included. Inflation is built into this study.
The services provided to the residents can be decreased or eliminated. Residents certainly don't want this solution!
What will happen if the condominium fees don't change?
Utilities may be turned off if the bills are not paid.
If the contractors think they are not going to get paid or that they have to fight for their money, they might be reluctant to make repairs.
The buildings and recreational facilities might deteriorate and costs of repairs could increase because routine maintenance was abandoned.
The difference in the cost of the remedy would need to be made up by the association in the case of a disaster if the property is underinsured.
There could be so much disagreement among the board members over which bills to pay that owners might not want to serve on the board.
A condominium maintenance fee is a "living" expense and changes should be expected. In the real world, costs constantly adjust as expenses for products and services change. Even though your condo fee changes, it will probably be only once a year. The bottom line is that you should want your fees to be high enough to maintain the complex as a first-class condominium.
Kay Senay is the author of CONDO BUYING & OWNERSHIP MADE SIMPLE: TIPS TO SAVE TIME & MONEY. This book is full of Kay's secrets for solving difficult condominium issues. Check out her website at condominium for FREE TIP SHEETS, books and more informative articles.Flagstaff Condos: Flagstaff condos
This article, the best article ever, kindly provided by UberArticles.com
