Condo budgets

Wed, 21 Apr 2010 16:11:18 +0100

Does a lower condo fee mean a well-managed condo?
NO. A condo association may have low condo fees because it has no reserves for major repairs. When it comes time to replace the roof, or repave the parking lot, or repair the heating system, the unit owners could have to come up with the entire amount on short notice.
But a higher monthly fee doesn't necessarily mean a well-managed condo. The fee could be higher because other unit owners don't pay their fees on time, or because there have been major repairs, or because the condo trustees decided to increase reserves in anticipation of major repairs.
The amount of the condo fee isn't directly related to the health of the condo association, and there's no guarantee that the fees won't increase in the future. Carefully reviewing the condo budget and financials will disclose more information. Not every buyer's attorney reviews condo financials, so be sure to ask whether these important services are covered. I always include condominium document review, including budgets and financials, when I represent condo buyers.

Condo fees

Mon, 29 Mar 2010 20:19:49 +0100

Condo fees in Massachusetts are the monthly amount that each unit owner pays for the joint expenses of the condo association.
Ideally, the condo trustees meet each year, adopt a budget that includes enough to pay the anticipated yearly expenses plus a reserve, and send notices to each unit owner.
And in the perfect world, the budget is exactly on target, there are no unexpected expenses, and all the unit owners pay their condo fees on time.
The reality is usually something different, and it works well until suddenly it doesn't. Here are two examples.
Some lenders won't approve a mortgage on a condo unless the reserves are sufficient. This could affect you if you want to sell your unit, because your buyers won't get their mortgage and won't be able to close as you expected. even if you're not planning to sell any time soon, you may want to refinance, but you can't get a new mortgage because the condo's reserves are insufficient.
What happens when your neighbors stop paying their condo fees? If the condo association has a properly adopted budget, and has complied with all of the legal requirements, the condo association - not you or the other unit owners - can get ahead of your neighbors' lender for some of the unpaid condo fees. Since lenders don't like to lose their priority, they sometimes choose to pay their borrower's back condo fees and collect it from the borrower later.
This is not a solution to try at home. Strict compliance with all the legal requirements is the minimum, and the requirements can be very detailed and precise. Consult an experienced real estate attorney who is familiar with condominiums and their governing documents.

condo-fees

Condo budgets

Condo fees