M.L. from Connecticut writes:
Dear Mister Condo,
When I purchased my condo, it was HUD owned. It was purchased for a very good price. Soon after my purchase, the HUD contract expired and the committee decided to go co-op. Our common fees are between $600 and $800 per month depending on whether you have a two or three bedroom unit. My unit is paid for with no mortgage attached. However, my common fee is over $600.00 monthly with no amenity except for heat and hot water. Is this average for a co-op? I have friends with co-ops with pools, gyms, newly structured flooring and kitchens who pay only about $300 monthly in common fees with tax included. Can you think of why there should be such a discrepancy?
Mister Condo replies:
M.L., every condo, co-op, timeshare, or other common interest community is different in what they pay for common fees. There is no “normal” for common fees as the association sets the fees based on their interpretation of the common interest community’s documents and their own fiscal planning. While $600 per month does sound high for a condo with no amenities other than heat and hot water, it is quite possible that the association has other expenses that are not so readily apparent. These could range from items like long-term funding for major capital improvements (a new roof, a new elevator, a new parking lot) to legal obligations (an ongoing lawsuit, a high rate of delinquency within the association) to just plain old frugality. The bottom line is that you, as a unit owner within the common interest community, have every right to request a copy of the association’s financial statements to see how your money is saved and spent by the association. If you have questions about where your money goes, by all means, ask for an explanation. I would encourage you to have your friends do the same with their co-op. At $300 per month, it sounds like they are getting an awful lot of amenities. Hopefully, their community is also properly funding their reserve fund for those repairs that will be necessary down the road. Otherwise, they may find themselves hit with a special assessment for thousands of dollars to handle those repairs, whereas your association may already have the money. As a friend of mine often says “pay it now or pay it later”. I’d rather pay it in smaller portions now instead of being hit with a surprise down the road. Best wishes!