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Compare Condo Dues and Assessments

by Guest on Mar 17, 2013 Property Appraisal 1107 Views

Have you tried to compare condo assessments of a particular condo association with another one?
Due to various factors, it’s impossible to make an accurate comparison

There are many reasons why it's difficult to compare condominiums:

Age of the condo buildings may differ

Mechanical systems may differ

Type of materials used in buildings (brick, siding, stucco, wood)

Decks/Balcony on unit? - Is the unit owner or the Association responsible for repairs? Made of wood?

Elevators onsite? - If so, how many?

Parking garage onsite?

Amenities of each association may differ (and may include: pool, tennis courts, fitness center, laundry room, lobby, clubhouse, etc

Are there a lot of trees and/or landscaping in the common areas?

Landscaping? Who mows the lawn - the unit owner or the association?

Roads and/or parking lots - Are they private or public?

Utilities: Does the unit owner or the Association pay for water, electric, gas, cable, or wifi? It may vary greatly by association

Does the building have any construction defects? Is the builder still around?

Has the association deferred maintenance?

Maintenance agreements: Does the condo association have regular maintenance agreements with its vendors? This would usually cover the elevators, mechanical equipment, pool, plumbing, etc. Not having these agreements or performing regular maintenance will usually result in higher repair costs and possibly costly emergency repairs.

Has the Association had a Reserve study done? If so, are the Reserve funds properly funded? Does the Condo association have to catch-up?

Does the Association have annual audits? (They usually cost $3,000 to $6,000 per year)

Has a Reserve Study been performed? If so, is the association following its guidelines?

When was the roof last replaced? If more than 15 years ago, the condo association may need to assess higher dues. They may need to save money to be able to replace the roof when needed. (This is assuming the reserve fund is low)

Have there been many plumbing leaks? If so, has the problem been corrected?

Does the community have many delinquencies? If so, cash flow may be poor and the dues may be high to compensate for those units that can’t pay

Has the community been involved in any lawsuits? If so, legal fees the insurance premiums may be high

If it’s a relatively new condo association (within 5 years), the dues may not have increased since being set up by the developer. Developers usually set the initial dues artificially low, in order to sell units. If they were low to begin with and haven’t been increased much, the association may have a cash flow problem or underfunded reserves.

Does the Board of Directors like to be popular and refuse to raise dues, even when necessary?

Does the Association borrow from its reserve fund to pay for operating expenses (regular maintenance, landscaping, etc) in order to avoid increasing dues?

Is one condo association managed better than the other? Are costs and contracts reviewed at least annually?

Based on many factors, it’s impossible to make a valid comparison of condo association dues.

Condo and HOA industry-30 yrs experience from every angle: CPA, Board Member, Auditor, Taxes, Association Manager, daily Accounting, Collections, Board member Training seminars, Real Estate Broker and more. Now, I Help Homebuyers Reduce their Risk! Buyer Beware! http://www.condo-smart.com

Article source: http://www.appraisalarticles.com/Real-Property-Appraisal/4325-Compare-Condo-Dues-and-Assessments.html