A.L. from Hartford County writes:
Dear Mister Condo,
Mr. Condo, how should HOA fees be calculated in a condo association in the State of Connecticut? Is it fair that everyone pay the same fee every month even if all the units are not the same size?
Mister Condo replies:
A.L., common fees are typically defined in the condo governing documents and usually are derived using the percentage of unit ownership formula which does take square footage into consideration. However, neither the state nor the governing documents require the use of this formula and there are many other perfectly legitimate methods of determining common fees. The only universal rule is that the governing documents dictate the formula and that formula can only be changed by very strict rules for doing so. It is extremely uncommon for the formula to be changed and typically requires a full consent vote of the unit owners and, many times, even the mortgage holders of the units. Some of the other factors that I have seen that determine common fee allotment include: water-view versus non-water-view, top floors versus middle and bottom floor units in a high-rise, and end units versus middle units. Some associations like yours use a simple “everyone pays the same” common fee, which may not be fair, but is certainly not illegal and is well known before anyone purchases into the association. There isn’t too much you can do about it, A.L., as changing the common fee schedule is a major legislative ordeal. You can talk to your Board but I doubt you will see things change. Good luck!
2 thoughts on “Fairness of Condo Common Fees Questioned”
In a perfect world it should not matter as much as we might think. The common fee would be a factor in the value and selling price of units. In purchasing units buyers should take into account many factors, including the price of a unit, taxes, services provided, and condo fees, then act accordingly in making offers and choosing between various properties on the market.
For example, I am lucky to have one of those views, yet only the size of my unit is considered in the fee. That seems reasonable since the maintenance required has nothing to do with the view. Yet my unit likely cost me more to purchase than it would have if my fee was higher based on the view.
Common Interest Community ownership, such as in a condominium, implies that all owners own a percentage of all real estate assets. Paying the expense of operating these assets, including putting away reserve monies to pay for major maintenance and upgrades is everyone’s responsibility.
As BG aptly points out, ‘fairness’ isn’t necessarily a factor in determining ownership percentages, but it is these percentages that determine assessment amounts, voting power and so forth.
Any potential buyer must educate him/her self as to these vagaries of CIC ownership.