CONDO OWNER ANGRY ABOUT FEE INCREASE!

Kay Senay (ezinearticles.com)

“I'm on a fixed income and my condo fees keep going up. Pretty soon I won't be able to afford living here!"

Changing condominium fees concern owners in every association. Usually condo fees change on a fairly regular basis, and the change is normally up, not down! Sometimes when people buy condominiums, they look at the fee at the time they're buying. But they might not know 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.

• Services that the developer performed at no charge will have to be paid by the association.

• A big repair job needed done and there wasn't enough money to cover it.

• The budget was insufficient.

• Costs of materials for maintenance, repairs, and replacements of the condominium's property increased.

• Costs of services such as trash removal, landscaping, and snow removal increased.

• Costs of administrative fees increased for the condo association's attorney, accountant and management company, to name a few.

Can condo fee increases be eliminated?

Probably not, because fees fluctuate depending on changing expenses and inflation, just as your expenses would change if you were in a single-family home.

How can condo fee increases 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.

The board of directors should have a professional company prepare a condominium Reserve Study. This study shows the costs of repairs/ replacements for the various parts of the property over the next 10-20 years. It includes charts indicating how much should be budgeted each year. 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 if the condominium fees never changed?

Some bills for services may not get paid causing utilities to be turned off.

Contractors might be reluctant to make repairs if they think they are not going to get paid or that they have to fight for their money.

The buildings and recreational facilities might deteriorate and costs of repairs could increase because routine maintenance was abandoned.

The condominium property may be under-insured so the association would have to make up the difference in the case of a disaster.

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.