I.T. from Hartford County, Connecticut writes:
Dear Mister Condo,
Hello! I just moved into a new condo. I pay $500 in monthly common fees. Originally, the common fees were supposed to be 25cents per square meter. Before I signed the purchase agreement, the developer raised it to 35 cents per square meter. Today, I met with a neighbor who told me that he was told by the developer / contractor that he will be exempted to pay condo fees for one year if he purchases the condo. The developer offered him this deal. I want to ask is this legal? Can the developer do that? And, if so, why can’t I profit from the same deal? I will really appreciate your answer. Thank you.
Mister Condo replies:
I.T., congratulations on your new condo purchase. I hope you have many years of enjoyment from your investment. I am not a lawyer, so please consider my answer as friendly and not legal. If you feel you have a true legal matter on your hands, I strongly encourage you to hire an attorney who can better advise you of your legal rights.
Common fees are the way in which a community association collects the monies it needs to function. No one unit is exempt and no one may have their common fees waived. However, it sounds like your new condominium is not yet a community association, in that the finances of the organization are being handled by the developer. I assume that the developer has plans of turning over the association to the newly created Board of Directors at some point in the future when the developer has sold enough units to relinquish control. To that extent, a developer could waive monthly fees (which are not truly common fees as there is not yet an association) as a sales enticement to persuade a buyer to purchase a condominium. As you have already purchased your condominium and agreed to pay the monthly fees, it is unlikely that you could negotiate a similar deal.
This is a classic case of “Caveat Emptor” or “Buyer Beware”. Nothing sours the sweetness of a new purchase like finding out someone bought the same thing for less. You didn’t mention if there were any differences between your condo and the one your neighbor may be purchasing but since you already own yours, it may be fair to say that you have a more desirable unit. There may not have been a need to incentivize the sale of your unit. A good deal, they say, is in the mind of the buyer. If you felt you got a good deal when you purchased your condo, my advice is to enjoy the peace of mind that came with making the purchase. 12 months from now, you will still have the more desirable unit and your neighbor will be paying the same common fees as you. Depending on when the developer to Board transition occurs, the developer may even find himself having to make the payments for your neighbor for the difference between the year of “free” common fees he offered and when the unit actually owes true common fees to the association. The “free common fees for a year” really amounts to a discount on the selling price of 12 times the monthly fees. If the unit fees are $500 per month like yours, that amounts to $6,000. Depending on the actual selling price of the condo, that may or may not reflect a true savings. I hope that makes sense. Good luck with your upcoming developer transition.