Everything You Need to Know About Condo Association Fees
If you're looking to buy a condo or townhome, one expense you need to factor into your budget is Condo Fees. In this video, Martika Jenkins will explain everything you need to know!
When we're working with our clients, knowing their monthly budget helps us factor in how the HOA fees will fit within their budget.
What Are Condo Fees?
Condo Fees or Home Owner's Association (HOA) fees are monthly expenses a unit owner pays to the association to cover the ongoing maintenance, management, and expenses of the condominium complex including the exterior and interior common areas. The fee is based on the particular percentage ownership share of the subject condo and is set in the condo association documents.
What Do Condo Fees Include?
Fees differs drastically depending on a number of different variables based on the maintenance needs of the association and the amenities offered. In the Boston area, the range of the monthly fee could be from $100 per month for a unit in a self-managed two-family duplex to over $1,000 per month for a unit in a professionally managed luxury building with 24 hr concierge.
Some of the more typical items included in the association fees are:
Master insurance for the entire building
Water and sewer expenses
Interior and exterior maintenance
Snow removal
Refuse removal
And an important item to note: Heat. In our area of Boston, older buildings often have a central heating system. So sometimes a higher fee might be related to your heat being included in your condo fee.
When more amenities exist the fee will reflect these amenities or services, such as:
An elevator and its maintenance
Parking or valet parking
Storage options
Gym, pool, or other recreational amenities
Community rooms
Limited or full-time concierge
Onsite property management
Are Condo Fees Negotiable?
While the condo price may be negotiable, condo fees are not. Every year, the condo association meets to go over any projects and expenses and their projected budget for the year ahead. Then the condo fee is reviewed to determine if it will be reduced, increased, or kept the same. As a unit owner, this is a process that you can be involved in.
Pro Tip! When considering one particular condo in your home search, we will ask for a copy of the annual budget for the association. Reviewing the budget will allow you to see what is actually covered by the fee. We will also ask about any current special projects or projects planned for the future, as those will affect the future payments for that particular condo.
What Are Special Assessments?
Aside from a condo fee, associations from time to time impose special assessments, to raise additional funds over and above the yearly budget. This money is typically allocated to pay for special projects like a new roof, common area improvements, or other necessary updates. Understanding what special assessments might be in the pipeline for an association will help you decide if the future expense will be within your budget.
One thing we like to see in the larger associations is a strong financial reserve. Many well-run associations set aside financial reserves for planned future projects, emergencies, and other capital improvements. A strong reserve can ultimately help you as an owner avoid any surprise expenses or assessments down the road. Keep in mind that smaller associations with only 2-3 units don’t typically hold too many reserves. Instead, any improvements or fixes are addressed as needed.
Three Things to Think About
Let’s review three questions to ask when you see a condo that you really like:
What is the monthly condo fee and what does it include? Factor in that it might reduce your other bills if it covers big ticket items like parking, heat, or electricity.
What special assessments or projects are in the pipeline and how will they affect the future costs of the association?
What does the association have in reserve?
Find the Right Home Within Your Budget
There are a lot of things to consider when purchasing a condo and HOA fees are one important item. If you have any additional questions, reach out to Martika Jenkins, REALTOR® with Dwell360.
We would be happy to help you through the process of finding the right home at the right price in the greater Boston area!
Dwell360 is an elite residential real estate firm based in Newton, Massachusetts, servicing the cities and suburbs of metro Boston. Dwell360 is a leader in luxury real estate throughout Boston, Brookline, Newton, Needham, and other communities of the greater Boston area. Search for homes in Massachusetts or give us a call!
