Mon, 27 August 2007
Condominium Home Owners Dues
The saying "there ain't no such thing as a free lunch" refers to this custom in a back-handed way, meaning that free things often have hidden costs. ...
The phrase refers to the once-common tradition of saloons in the
This is Lynnsy Logue, The Real Estate Lady and Condo CanDo, Charlotte NC
Twice this week I have heard stories about condominium home owners dues.
Maybe it is because condominium ownership is complex. After all, it is just air space. And condominium ownership is just a percentage. And the Rules and Regulations and the By-Laws and all the documents governing a project can be daunting. And financial statements and budgets for water and bills for taxes of the common area…and the number of dogs or cats…and on and on…I mean after all, you just want a place to hang your hat,
keep your stuff so you can get to the beach or the mountains on the weekends or be able to enjoy uptown and all the razzle-dazzle…or maybe because you just don’t want to have to worry about anything except paying the mortgage and the monthly dues. Let someone else worry. Right?
Please ask questions. What are the actual expenses? Line by line? How much is being set aside for maintenance as well as for the repair or replacement of the big items? In both cases, for the first year of each complex, the home owners were given a low figure for monthly expenses. Of course, new home buyers thought this was a great price, wow! condo living was going to be great, until the project was turned over to the home owners…and the expenses were actually triple because the builder or the developer or the firm that handled the conversion either paid the difference for the first year or only paid a minimum with no funds for maintenance.
One complex had to come together, dig deep and climb out of a negative balance. And then they had to pay extra to take care of their condominium home. Several years later, they are getting on their feet. But meanwhile, the complex suffered, the values dipped and home owners were frustrated, mad and financially injured. With no recourse.
Some of the best complexes I know are self-managed and so are some of the worst.
Ask questions. Make sure you get a recent financial statement.
There is a form now that speaks to the Home Owners Association and what the dues cover, if there are any opening lawsuits and if there are any pending assessments.
And, oh, by the way...you can make your offer contingent on the seller providing the answers...and then, my friend, make sure you verify everything yourself.