Home Owner Associations, Condo Fees.............How Much and What do you get?

While walking around Noel Night I stopped in 55 West Canfield and they mentioned $250 HOA fee, which included just about everything except for [[Electric and Cable.) This doesn;t seem bad at all. I thought I read or heard around that most properties were getting $500, $600 per month?

Does anyone have any other reported fees at properties such as; Garden Lofts, Woodward Place, Riverfront Towers, Willys Overland, 1300 East Lafayette Park, Research Lofts, Grinnel Place, Ellington, Park Shelton, etc......

Somewhat on the same topic, what happens when a major project, say a $200,000 roof replacement of a said building needs to be replaced. Is it typical that your HOA will cover? or is there a typical clause in your purchase agreement that you will required for costs?

Condo fees vary greatly. In general, lower costing condos have higher fees. This is due to the cost of the fee impacting the resale price. At the very basic level they should include the majority of your home insurance cost, and maintenance of buildings and grounds. Some things will increase the fee such as the inclusion of water or another utility such as internet or electricity, or an amenity such as a pool, workout facility or clubhouse.

Also condos with a lot more common area will most likely have a higher fee. For example, a $200k condo that is a site condo [[not attached to others) will need more upkeep in the common areas per unit than a multi story, multi unit condo.


Higher fees will generally mean lower or no special assessments for things such as roofs, fences, or other common area improvements. Each condo has a board which decides these things. I would suggest speaking to some people who live in the condo, and by some I mean more than one because each person may be biased in their view of condo fees.

Yeah, remember too, at co-ops like Lafayette Towers and 1300, those HOAs include property taxes and insurance. At 1300 includes front desk service, I think they have pools, etc.

There can also be surprises that come from ownership of a part of a bigger building as DetroitPlanner suggests;

http://blogs.montrealgazette.com/201...-condo-buyers/

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Originally Posted by corktownyuppie

Yeah, remember too, at co-ops like Lafayette Towers and 1300, those HOAs include property taxes and insurance. At 1300 includes front desk service, I think they have pools, etc.

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Good point co-ops are structured with a very different philosophy. In a coop all members own a share in the complex, while a condo you own the inside of your unit. Co-ops can also have rules about subleasing your unit and you need to be accepted into the association. In general, co-ops have higher monthly fees but less riff-raff. Co-ops also tend to be a bit riskier of a purchase as you may be stuck with something you can't sublease, or if there is an unexpected emergency that costs a ton to fix you might have to pony up for a lot more than expected. My aunt had a co-op and the association would periodically update flooring, kitchen appliances, and mechanical stuff out of the assessment fees, but you may get stuck with a few choices. Chances are the community at large would vote down getting really fancy stoves with stainless steel premiums so if you want those, you may not want to be in a co-op.

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Originally Posted by 313rd

While walking around Noel Night I stopped in 55 West Canfield and they mentioned $250 HOA fee, which included just about everything except for [[Electric and Cable.) This doesn;t seem bad at all. I thought I read or heard around that most properties were getting $500, $600 per month?

Does anyone have any other reported fees at properties such as; Garden Lofts, Woodward Place, Riverfront Towers, Willys Overland, 1300 East Lafayette Park, Research Lofts, Grinnel Place, Ellington, Park Shelton, etc......

Somewhat on the same topic, what happens when a major project, say a $200,000 roof replacement of a said building needs to be replaced. Is it typical that your HOA will cover? or is there a typical clause in your purchase agreement that you will required for costs?

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Fees are not normally based on the resale price of the condos/homes. That's an individual situation. The only insurance an HOA normally includes is for the structure itself from sheetrock to sheetrock. Also a well run HOA will have a reserve fund established for anticipated expenses such as roof replacement, repaving, pool resurfacing, exterior painting, etc. Special assessments should be a rare thing. I was President of a condo association for 12 years and we never had a special assessment nor any avoided repairs. The community we have now lived in for 16 years has never had an assessment nor any avoided repairs/maintenance.

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Originally Posted by corktownyuppie

Yeah, remember too, at co-ops like Lafayette Towers and 1300, those HOAs include property taxes and insurance. At 1300 includes front desk service, I think they have pools, etc.

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1300 is a co-op. Lafayette Towers apartments are rental.

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Originally Posted by Trumpeteer

Fees are not normally based on the resale price of the condos/homes.

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Very true. However, in a competitive marketplace they can affect the value of the home. All things being equal, the condo with the lower fee will win out in attractiveness over the one with a higher one. However, as you say, a condo association with deep pockets so that they don't need to special assess can be a very attractive point as well.

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Originally Posted by 313rd

While walking around Noel Night I stopped in 55 West Canfield and they mentioned $250 HOA fee, which included just about everything except for [[Electric and Cable.) This doesn;t seem bad at all. I thought I read or heard around that most properties were getting $500, $600 per month?

Does anyone have any other reported fees at properties such as; Garden Lofts, Woodward Place, Riverfront Towers, Willys Overland, 1300 East Lafayette Park, Research Lofts, Grinnel Place, Ellington, Park Shelton, etc......

Somewhat on the same topic, what happens when a major project, say a $200,000 roof replacement of a said building needs to be replaced. Is it typical that your HOA will cover? or is there a typical clause in your purchase agreement that you will required for costs?

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I'd never live somewhere with fees. My in-laws paid $80 a month 10 years ago when they bought their condo, now they pay $350 and still had to pay $5000 when the roofs had to be replaced.

Condos and HOAs generally have two budgets, the operating budget and the capital budget. The operating budget generally covers the month-to-month expenses, while the capital budget covers those which will hit every three, five, or ten years. Most condo memberships are unwilling to "tax" themselves enough to maintain a decent capital budget, so sudden big expenditures like a new roof often require assessments.

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Originally Posted by Hermod

Condos and HOAs generally have two budgets, the operating budget and the capital budget. The operating budget generally covers the month-to-month expenses, while the capital budget covers those which will hit every three, five, or ten years. Most condo memberships are unwilling to "tax" themselves enough to maintain a decent capital budget, so sudden big expenditures like a new roof often require assessments.

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A decently run condo assoc. has a capital improvements line item in their yearly dues. This is not a "tax" but a foreward thinking allowance for those items that need eventual replacement/refurbishing. Any smart buyer looks at the Capital Improvements budget when considering whether to buy. The less than brillant buyer simply looks at the purchase price.

I was on a condo board for a number of years. We were able to avoid special assessments by maintaining a capital budget and scheduling expenditures as carefully as possible, but sometimes something unexpected comes up. In our case, we discovered that prior to condo conversion, the building had been improperly treated with a subsequently banned pesticide which was a potential health hazard. In the end, the expenses were manageable within the budget, but it didn't have to have turned out that way. If it hadn't, there would have been an assessment made based upon the percentages of common ownership as detailed in the condo agreement, and our conservative budgeting wouldn't have been able to prevent it.

You really need to look at the condo financial documents to see if the building is run in a financially sound way. You also need to make sure you understand what services are included in the fee, so you can make a fair comparison between buildings.

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Originally Posted by Trumpeteer

A decently run condo assoc. has a capital improvements line item in their yearly dues. This is not a "tax" but a foreward thinking allowance for those items that need eventual replacement/refurbishing. Any smart buyer looks at the Capital Improvements budget when considering whether to buy. The less than brillant buyer simply looks at the purchase price.

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In too many associations, the capital budget will get raided for someone's pet project or the basis of its calculations will be inadequate. When you have a condo meeting and explain that the condo fees need to be increased to shore up the capital budget and avoid future assessments, there is a tremendous amount of opposition. And yes, condo fees or dues are to all intents and purposes a "tax" paid for the common "good".

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Originally Posted by Hermod

....condo fees or dues are to all intents and purposes a "tax" paid for the common "good".

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I've been a member of our condo association's board of directors for the past five years. My take on how to describe condo ownership, the monthly fees and the occasional assessment is as follows.

Let's say you purchase a condo unit in a development that includes a total of 100 condo units. You become the owner of that condo, meaning you have undivided ownership of everything inside it, beginning with the paint film, the electrical outlets, the plumbing shut-off valves as they emerge from the walls, etc. However, you also become a co-owner with a 1/100th ownership interest in everything else that makes up the common elements in that condo development, including the stuff in the walls, the roof, the open area landscaping, the roads, streetlights, etc. [[caution - some condo developments may have classes of units that have have been assigned a differing "percent of value" so that the ownership interest, the monthly fee and the value of your vote may be different than those of your neighboring condo owner).

The monthly fee is to cover the current year annual costs for the operation and maintenance of the common elements, plus the amount that the board has budgeted to add to the replacement reserve account during the current year to go towards covering the anticipated costs of future projects such as painting the exterior trim in four years, a roof replacement in ten years, repaving the roads in twenty-five years, etc. A formal reserve study can be performed to estimate how much the board should be adding to the replacement reserve account in each of the coming years to enable the projects to be completed when needed without having to assess each unit owner.

If I were considering the purchase of a used condo, before I signed the purchase agreement at the very least I would want to see and know the following:
a) obtain a copy of the condo association's current annual budget, plus the most recent financial statement of income, expenses and reserves; the expense section of the budget will tell you what categories of services are provided by the condo association.
b) ask for the percent of value assigned to the unit you are considering to purchase and if it is the same percentage that has been assigned to all others in the condo development
c) ask if the board of directors employs the services of a professional property management company to manage the day-to-day operations of the association
d) ask for the amount of the current monthly fee, when was it last increased and whether an assessment has been announced or is in the process of being collected
e) ask for the number of units that are currently behind on the payment of their monthly fees and assessments and for the total amount of delinquencies owed to the association; also ask if the numbers are higher or lower than at the same time one year ago
f) ask if less than 10% of the total units in the development are leased and are thus occupied by a non-owner
g) ask when was the last time the board of directors had a formal reserve study made, what did it recommend and is the current amount in the replacement reserve account equal to what the study said it needs to be in order to cover future project expenses without requiring a separate assessment.

i live in a co-op and here is what my $667 a month gets me.
1 car garage, basement, 3 bedrooms, all maintenance inside and out [[my back yard is my responsibility), taxes and water. i pay gas, electric, cable and phone.
if any appliance breaks, i get a new one. if i want a different one than the standard, i pay the difference. we have an on-site maintenance crew so repairs are handled with in a day or two depending on severity.
to me, it is care-free living. living in an apartment, you are at the mercy of the land-lord. living in a condo, you pay for all utilities except for water i think. and for appliances if they break.

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Originally Posted by Chinman

i live in a co-op and here is what my $667 a month gets me.
1 car garage, basement, 3 bedrooms, all maintenance inside and out [[my back yard is my responsibility), taxes and water. i pay gas, electric, cable and phone.
if any appliance breaks, i get a new one. if i want a different one than the standard, i pay the difference. we have an on-site maintenance crew so repairs are handled with in a day or two depending on severity.
to me, it is care-free living. living in an apartment, you are at the mercy of the land-lord. living in a condo, you pay for all utilities except for water i think. and for appliances if they break.

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It depends on the condo. Some have negotiated a blanket CATV or SATV contract and the cost is included in your condo fee. In some, the AC and heating are on a common meter and included in your fee while you pay the rest of the electric bill.

I think there has been a lot of very good information supplied here. I would just add that when you are looking at a condo, ask if they are being sued by anyone, or if they have been sued in the past.

It is a bit of a bummer to buy a place and discover you are facing a special assessment for something that happened long before you moved in.

in general when you buy into a condo, you are entering into a financial agreement with a bunch of people you don't know and have no way to check their finances. In a small complex if a few folks don't pay their assessments because they've lost their place to foreclosure, you will feel the pinch in loss of services or in increased fees.

We have a condo in Chicago that has lost more than half of its value. Folks that bought at the height of the bubble have looked at their balance sheets and have executed what is called a strategic default. In essence why pay on a $70,000 debt when the place is only worth $20,000. Makes sense. But the result is unfun for those left. More empty units translate into reduced operating funds and the hallways aren't painted or the frayed carpet isn't repaired or the funky parking lot gate stays funkified. All that translates into lower property values so that once $70k is now not $20k but rather $18k.

i get the impression people look at condos as property, when they are really looking at money. Examine their books. If they won't provide you with budgets and balance sheets and all that boring business stuff. Run away. Fast.