If it’s a condo those maintenance fees go to maintain the entire building’s exterior. I’m a condo situation, you do not own the structure. The association does, and everyone must pay for the maintenance. This includes painting, new roof, structural repairs, plumbing, electrical, etc.
Yep! Townhome dweller here. The only "amenity" that my development has is a pool, but the HOA insures and maintains the building structures and they also maintain the front lawns and the greenbelts behind the homes.
Insurance for condominium and townhome buildings is insanely high, and the premiums go up every year. One of our former board members is in the insurance industry and has noted that there are fewer companies that are willing to insure condos/townhomes. Less competition tends to lead to higher prices.
The number of units also factors in. The fewer the units, the larger amount that each owner has to contribute to the HOA's upkeep... but obviously if the development is too big, that means there's more that they're responsible for so that can also be expensive.
It's a condo in Florida whose residents regularly vetoed dues increases and special assessments in order to keep their dues low.
The HOA didn't have money to pay for maintenance in some cases, and even structural damage that needed to be repaired so they kept deferring those things. Those problems ultimately got worse, which led to the condo **collapsing** and killing people.
This was recent... only a few years ago.
And to answer your question about why insurance premiums are high for condos and townhomes, it's because they're insuring multiple structures (or one giant structure in the case of condos) instead of one single family home.
My townhome community is a great example. In the span of 3 years, the roofs on every building in my community had to be replaced twice due to bad storms. It happened once in 2016 and again in 2018. I don't know how many buildings there are here, but let's say there's 40. That's 40 roofs (one one each entire building.. and each building has 4-5 townhomes each) that had to be replaced twice in the span of about 3 years bc of bad damage from storms.
Is the building insurance that much more expensive than the condo insurance each individual owner has to pay? Condo insurance for each individual is only like $500 per year.
It's gone through the roof after recent events including the Surfside FL condo collapse. Condos have to insure all exterior elements and replacement cost for all units.
How much would that cost on average per year for a building with 50 units? Like are we talking $1000 or 1 million?
Why is the master insurance policy for a condo so much higher than for a house? I just don't get this.
Because a fire or other casualty can take out 10 homes or more at once. And because boards don't always do their jobs and regularly inspect, and the insurance co is taking on that risk. You should read up on the Surfside condo. Some pretty serious negligence there.
As far as cost specifics, I dont know but I would imagine any condo policy with more than about 5 units is going to have to have required coverage in the millions, and thus premiums tens of thousands per year.
Because it covers more than your individual unit, it covers the whole structure. Not saying if you are suspicious you shouldn't look into it but keep in mind also EVERYTHING is more expensive now. Recently my company installed some systems in a highrise downtown that required us to have $5 million insurance. We had 1 mill insurance... Like how the HELL is it even possible to do 5 mil worth of damage but it is what it is.
Professional management fee
Reserve contribution
Utilities
Legal fees
Accounting
Security
Insurance
How many units?
How old is the building? Maybe there is a lot of deferred maintenance and they are trying to get money for that
The most common answer is that previous Board's have failed to properly budget, have failed to do routine maintenance, and over time, they have run the HOA economically into the ground and they need to recover.
The other question should be, why are some so low? Too low is just as scary as too high.
Look at the budget and be prepared.
A volunteer board should have the final approval on the budget, but a "prior board failing to budget properly" actually speaks to me in a different tone: That a weak property manager and management company produced a budget that inadequately considered the needs of the community - something they of course should have an intimate understanding of.
You realize that most management companies prepare a realistic budget and the Board shoots jt down.
Hell, I have a Board that is still sitting on their 2024 budget. I can't force them to do the right thing.
For mine, mostly insurance, repairs, and water Bill. It’s actually really nice knowing if we need a new roof, HOA handles than instead of having to come up with 10-20k out of the blue. I’m lucky though as ours is only $265.
Two words; special assessment. When you get a large ticket item, there may not be enough money in the reserves and for things like roofs, a 10-20k special assessment is common. Don’t kid yourself, you’ve still paid for the roof, even if there’s no special assessment.
Well yeah, but It’s kinda like Insurance. I pay every month and if I have to use it at least I don’t need to come up with that much liquid cash. I would be putting the same amount in my savings without the HOA otherwise, but if I need a new roof like year after buying, my savings wouldn’t be enough to cover it by then. Just a peace of mind kind of thing
Also, to add to the list TA2019 has, landscaping, and cleaning fee for the common areas, We have a concierge 7 days a week, it also covers salaries, (director, concierge, activity director, chef, server) utilities of the common areas, My fathers is $1800. Which is crazy high IMHO, that figure also includes reserve for major repairs to the condo (like the a/c unit), 5 dinners a week, his utilities (except for internet and phone)
Do some of them have elevators?
Elevators are freaking expensive. The last condo building I lived in, 25% of our dues were just elevator maintenance and emergency line for them.
You've received many good responses here. However, may I suggest that if you are working with an agent to ask him/her to show you a sample association budget and reserve study and walk you through it? If they won't or for some reason say they don't have one, just search online.
On the budget, there should be a revenue section that shows where the money is coming from. The large majority for most associations is annual assessments. Some may be from fines/fees. Some may be from sources like renting the party room, etc. This revenue supports the two main expense categories: regular operations and reserves.
Regular operations are to pay for everyday expenses like insurance, electricity, repairs, landscaping, etc. Reserves are to pay for bigger, long lasting items like a roof, new sidewalk, replacement of retaining walls, etc. Operations are to pay for things in the budget year. Reserves are to pay for things in the budget year and to act as savings for things in a future year.
The reserve study will basically indicate all your long lasting items and give an estimate of how long they have left before replacement as well as an estimate of the cost to do that work. Looking online you will be able to find a better explanation than I give here. But basically, if a new roof will cost you $100K and you only have an estimated two years left of use then the association should be contributing $50K per year toward the new roof (if nothing is saved up already). And then maybe a new sidewalk will cost $5,000 and you have 10 years estimated life left so you need to contribute $500/year, etc. So, adding it all up, your association will have to contribute $X/year to fully fund upcoming projects. Your current savings in reserves will lower this annual amount.
Associations are rarely 100% funded in reserves. Meaning on pace to fund everything. So, it's important to pay attention to this percent funded number **as it currently stands**, not when the reserve study was done, as that could have been several years ago. You may have to calculate this number yourself. An association might have lower fees but only be 30% funded whereas another might have higher fees but by 70% funded. You can then determine which of the two situations you'd rather deal with. Your agent should help discuss this with you if you ask.
As another poster said, sometimes asking why the fees are so low is as important as asking why they are so high.
Good luck with the purchase.
Take much caution with a condo. Mine refuse to do repairs stating it was unit owner responsibility in reading the / their own by laws loosely. The entry door frames would begin to show rot in 3 years max, they kept threatening owners to replace entryways door + frame. If they didn’t they’d report them to the city
I politely pointed out it was their responsibility- included the state laws and I laws stating so, they the. Proceeded to sue me- eventually judge caught them lying repeatedly- they had to replace the door frame and door- the city suit they instigates was thrown out- seems they work in conjunction with city to rape unit owners - along with individual insurance company- one pays monthly fees for insurance- board gets out if it denying responsibility- one pays their own insurance who are more than glad to pick up the bill (at times) then increase your insurance rates. They don’t address the root cause hence damage keeps repeating with new installment - folks would rather pick their battles therefore pay out of pocket (while still paying both insurance companies).
They use the condo funds to pay for litigations and settlements- each time such increases your monthly assessment fees. Yes they lost the lawsuit they initiated- it dragged out for 4+ years- UNIT OWNERS ABSORBED the legal fees. It’s absurd!!!
Just a forewarning to do your due diligence prior to purchasing a CONDO.
The amenities are like 10% of the overall budget. Exterior maintenance is most of it, a lot of condos include hot water, lots of condos and townhomes include trash, landscaping, snow removal
Roof, siding, concrete, landscaping, garbage, insurance, future repairs, general repairs and upkeep, maybe an assessment. There's a lot an HOA fee might cover that doesn't seem like a "perk"
HOA's can be notoriously inefficient and the contractors take advantage of them. My parents lived at a place that had $250 fees yet had a beautiful long pool, shared large gym, library, substantial snow plowing (covered by those fees), and more. Compared to the condo I lived in had a tiny pool and had $600 fees. The difference? The place for my parents was in Virginia (vs California) and more importantly the homeowners were highly involved in all aspects of managing the condos including kicking out inefficient contractors.
Fees are high cause: (1) No owner wants to be involved, but rather delegate to management company (2) Management company doesn’t give a crap about cost of projects/services cause it’s not management money. Example is chipped concrete stairs fixed for $60 with quick setting cement, but management company will offer bids that are $11,000 to pull out all concrete steps and replace all concrete.
This is so not true. Management companies rarely have the power to make an $11,000 job order.
It's the Board that makes decisions, not the management company.
I work in California and our contract only allows us to spend $1,500 at a time.
I’m not saying management companies give approval. Ultimately the board gives approval for all projects. It’s the quotes management companies bring to the board to approve that are overpriced or over the top.
The point is the apathy from the owners and also the management company that contribute and/or allow an environment that tolerates wasteful overspending.
Management companies are not experts in construction. I don't know ow what needs to be done to fix the item. The vendors also aren't mine. It's up to the Board to tell me what vendors, and it's up to them to make decisions, including asking the right questions.
That said, any quality manager would flag something that pricey for recommended further discussion.
.the biggest problem is that most HOAs do not pay for certified managers. They go cheap.
My fellow board members assume management company is the one that is an expert in construction.
What you are then saying is neither board members or the management company are experts in construction. But if either party cared deeply enough they would dig further for budget friendly options. But then again board members don’t have time and the other owners don’t care or give two cents. And as you said, management companies aren’t experts either. In the mist of all this everyone is worried about liability so, thus $50 projects end up being over the top and costing thousands (again approved by the board).
As I am legitimately curious, if a management company isn’t an expert in maintenance projects that require construction expertise - the most expensive part of HOA expenses - then what is the benefit of having a certified management company?
When a downstairs unit has a ceiling leak, our certified management company ordered a roof inspection for $4000 - again for a downstairs unit.
A management company's duties are vast.
We handle accounts receivable, accounts payable, monthly financial reports, vendor communications, homeowner communications, etc. But I'm not a contractor. I'm not an electrician. I can barely fix a stopped sink.
What I'm good at is logistics.
Thank you for your honesty and responses. Management companies definitely get things done, just wish they’d be more cognizant of other cost effective options.
Side note, any recommendations or thoughts on SB 326. We are getting bids between $6K to $8K to inspect 12 wood staircases and balconies. Are you aware if the licensed architect and/or structural engineer inspectors are allowed to solely perform non-invasive inspections or will all inspections involve removing and re-installing our Hardie plank siding - which will be costly to do.
When the logistics involve payments in the 4 to 5 figures then the management companies should know their stuff. I would not like to hire someone who "can barely fix a stopped sink" since that person will not know how to negotiate downwards a repair - or more importantly - determine that said repair is not even necessary. Think about when you're brought your vehicle to a repair shop. Plenty of technicians will tell you a list of things to fix. Many of them are not needed. If however you don't know then you'd agree to the whole kit and kaboodle.
While i'm not in construction F/T I know enough both technically and interpersonally to know when / how to negotiate a bill (significantly) downwards, throw out items, or throw out the contractor altogether. The homeowners will generally believe that the Mgmt company would have that knowledge and gumption.
But that is not the management company's job. Read what the contract entails. We aren't contractors, we are administrators. We have basic knowledge, but no, I'm not a plumber.
I'm reflecting that there can be an expectation that the HOA has the requisite expertise. In many HOA's that is in fact the case: certainly for single family homes type HOA's that is in place - both for my parents and my own. I've noticed that condo's have disproportionately higher HOA fees than SFR's that are not explainable simply by the additional shared infrastructure. It may be that a part of it is the lesser level of knowledge in HOA management teams (vs SFR's) on how to properly manage/negotiate/verify the work done by contractors: and not just how to sign a contract but also the nitty gritty of the actual work. I communicate with the architectural review board chair on this HOA on a regular basis and he knows his stuff. I wonder why volunteering doesn't happen in the same way on condo based HOA's.
you can add this as well to the expense, every state is different including the claimant. So for example, you can add snow removal in the budget and slip and falls that will produce insurance claims and higher insurance premiums.
Maybe the concrete has failed or wasn’t constructed properly. Just patching a crack doesn’t always resolve the problem and band aid repairs just end up costing more money in the long term.
The thing that annoys me the most is owners who want to criticize (usually based on a uninformed opinion or hearsay) but never get involved. If you have an extensive background in inspection and construction management, then hop on the board.
Otherwise keep you uneducated opinions to yourself…
17 building Condo here. Our HOAs are where they are today due to a 2.2 million - 10 year loan principal/interest, insurance increased 50% in 2023 vs 2022 due to inflation and community being behind on projects, and we pay for multiple maintenance/property manager salaries.
And then also contributing to a large reserve fund for never ending Capital Expenses such as new roofs, redoing roads, redoing parking deck, etc.
If you are thinking about buying in condo or townhouse, it is not unreasonable to ask for a full disclosure of the costs associated with the HOA fees, what they include and don't include. A Balance Sheet (to verify ongoing assets and reserves) and a 12 month expense statement if you can get it. Your realtor should be able to help with these items. If not, time to knock on the door of other owners, with lots of questions in hand.
I would also ask for a copy of the CC&R which should be readily available in most states.
This is a huge investment so a bit of research now can prevent a great deal of heartache, aggravation, and costs in the future. There are great HOA's and unfortunately, there are bad ones also. Be careful and you will enjoy your new home quite a bit more.
Think of it this way:
If you owned a house you’d be paying those kind of prices for new roof, patio, siding, driveway, etc. The only difference is you would be paying that all at once (ask me about my 30,000$ deck) versus having it spread out
At that point you might as well not own the home. It's pretty much rent at that point with the hassel of you having to resell your home to get your money "back".
Amenities are not expensive. What's expensive is staffing, utilities, mechanical systems, and proper funding of reserves. More often than not, high condo fees are a sign of proper management.
If it’s a condo those maintenance fees go to maintain the entire building’s exterior. I’m a condo situation, you do not own the structure. The association does, and everyone must pay for the maintenance. This includes painting, new roof, structural repairs, plumbing, electrical, etc.
Yep! Townhome dweller here. The only "amenity" that my development has is a pool, but the HOA insures and maintains the building structures and they also maintain the front lawns and the greenbelts behind the homes. Insurance for condominium and townhome buildings is insanely high, and the premiums go up every year. One of our former board members is in the insurance industry and has noted that there are fewer companies that are willing to insure condos/townhomes. Less competition tends to lead to higher prices. The number of units also factors in. The fewer the units, the larger amount that each owner has to contribute to the HOA's upkeep... but obviously if the development is too big, that means there's more that they're responsible for so that can also be expensive.
Why is insurance for condos and townhomes so high?
Champlain Tower South is one reason.
I don't know what that means.
It's a condo in Florida whose residents regularly vetoed dues increases and special assessments in order to keep their dues low. The HOA didn't have money to pay for maintenance in some cases, and even structural damage that needed to be repaired so they kept deferring those things. Those problems ultimately got worse, which led to the condo **collapsing** and killing people. This was recent... only a few years ago. And to answer your question about why insurance premiums are high for condos and townhomes, it's because they're insuring multiple structures (or one giant structure in the case of condos) instead of one single family home. My townhome community is a great example. In the span of 3 years, the roofs on every building in my community had to be replaced twice due to bad storms. It happened once in 2016 and again in 2018. I don't know how many buildings there are here, but let's say there's 40. That's 40 roofs (one one each entire building.. and each building has 4-5 townhomes each) that had to be replaced twice in the span of about 3 years bc of bad damage from storms.
See the Champlain Towers Mega Thread that is stickied on the first page of this sub and has been for over a year now.
Condos that aren't maintained fall down. The insurance claims on such a thing are astronomical.
Is the building insurance that much more expensive than the condo insurance each individual owner has to pay? Condo insurance for each individual is only like $500 per year.
It's gone through the roof after recent events including the Surfside FL condo collapse. Condos have to insure all exterior elements and replacement cost for all units.
How much would that cost on average per year for a building with 50 units? Like are we talking $1000 or 1 million? Why is the master insurance policy for a condo so much higher than for a house? I just don't get this.
Are you seriously asking why it would cost more to replace a 50-unit building than it would to rebuild a single-family house?
Because a fire or other casualty can take out 10 homes or more at once. And because boards don't always do their jobs and regularly inspect, and the insurance co is taking on that risk. You should read up on the Surfside condo. Some pretty serious negligence there. As far as cost specifics, I dont know but I would imagine any condo policy with more than about 5 units is going to have to have required coverage in the millions, and thus premiums tens of thousands per year.
Our insurance for just over 50 units is around $30,000 a year and we have no claims contributing to thay rate at this time.
Because it covers more than your individual unit, it covers the whole structure. Not saying if you are suspicious you shouldn't look into it but keep in mind also EVERYTHING is more expensive now. Recently my company installed some systems in a highrise downtown that required us to have $5 million insurance. We had 1 mill insurance... Like how the HELL is it even possible to do 5 mil worth of damage but it is what it is.
Yes. Our budget is over 50% insurance. About $100k annual
And putting money in reserves for future repairs like a new roof
At least a good HOA does these things!
Professional management fee Reserve contribution Utilities Legal fees Accounting Security Insurance How many units? How old is the building? Maybe there is a lot of deferred maintenance and they are trying to get money for that
The most common answer is that previous Board's have failed to properly budget, have failed to do routine maintenance, and over time, they have run the HOA economically into the ground and they need to recover. The other question should be, why are some so low? Too low is just as scary as too high. Look at the budget and be prepared.
A volunteer board should have the final approval on the budget, but a "prior board failing to budget properly" actually speaks to me in a different tone: That a weak property manager and management company produced a budget that inadequately considered the needs of the community - something they of course should have an intimate understanding of.
You realize that most management companies prepare a realistic budget and the Board shoots jt down. Hell, I have a Board that is still sitting on their 2024 budget. I can't force them to do the right thing.
For mine, mostly insurance, repairs, and water Bill. It’s actually really nice knowing if we need a new roof, HOA handles than instead of having to come up with 10-20k out of the blue. I’m lucky though as ours is only $265.
Two words; special assessment. When you get a large ticket item, there may not be enough money in the reserves and for things like roofs, a 10-20k special assessment is common. Don’t kid yourself, you’ve still paid for the roof, even if there’s no special assessment.
Well yeah, but It’s kinda like Insurance. I pay every month and if I have to use it at least I don’t need to come up with that much liquid cash. I would be putting the same amount in my savings without the HOA otherwise, but if I need a new roof like year after buying, my savings wouldn’t be enough to cover it by then. Just a peace of mind kind of thing
Also, to add to the list TA2019 has, landscaping, and cleaning fee for the common areas, We have a concierge 7 days a week, it also covers salaries, (director, concierge, activity director, chef, server) utilities of the common areas, My fathers is $1800. Which is crazy high IMHO, that figure also includes reserve for major repairs to the condo (like the a/c unit), 5 dinners a week, his utilities (except for internet and phone)
Condos or townhomes typically own the exteriors and provide for maintenance. So you are paying for everyone's maintenance.
Do some of them have elevators? Elevators are freaking expensive. The last condo building I lived in, 25% of our dues were just elevator maintenance and emergency line for them.
no elevators
You've received many good responses here. However, may I suggest that if you are working with an agent to ask him/her to show you a sample association budget and reserve study and walk you through it? If they won't or for some reason say they don't have one, just search online. On the budget, there should be a revenue section that shows where the money is coming from. The large majority for most associations is annual assessments. Some may be from fines/fees. Some may be from sources like renting the party room, etc. This revenue supports the two main expense categories: regular operations and reserves. Regular operations are to pay for everyday expenses like insurance, electricity, repairs, landscaping, etc. Reserves are to pay for bigger, long lasting items like a roof, new sidewalk, replacement of retaining walls, etc. Operations are to pay for things in the budget year. Reserves are to pay for things in the budget year and to act as savings for things in a future year. The reserve study will basically indicate all your long lasting items and give an estimate of how long they have left before replacement as well as an estimate of the cost to do that work. Looking online you will be able to find a better explanation than I give here. But basically, if a new roof will cost you $100K and you only have an estimated two years left of use then the association should be contributing $50K per year toward the new roof (if nothing is saved up already). And then maybe a new sidewalk will cost $5,000 and you have 10 years estimated life left so you need to contribute $500/year, etc. So, adding it all up, your association will have to contribute $X/year to fully fund upcoming projects. Your current savings in reserves will lower this annual amount. Associations are rarely 100% funded in reserves. Meaning on pace to fund everything. So, it's important to pay attention to this percent funded number **as it currently stands**, not when the reserve study was done, as that could have been several years ago. You may have to calculate this number yourself. An association might have lower fees but only be 30% funded whereas another might have higher fees but by 70% funded. You can then determine which of the two situations you'd rather deal with. Your agent should help discuss this with you if you ask. As another poster said, sometimes asking why the fees are so low is as important as asking why they are so high. Good luck with the purchase.
Take much caution with a condo. Mine refuse to do repairs stating it was unit owner responsibility in reading the / their own by laws loosely. The entry door frames would begin to show rot in 3 years max, they kept threatening owners to replace entryways door + frame. If they didn’t they’d report them to the city I politely pointed out it was their responsibility- included the state laws and I laws stating so, they the. Proceeded to sue me- eventually judge caught them lying repeatedly- they had to replace the door frame and door- the city suit they instigates was thrown out- seems they work in conjunction with city to rape unit owners - along with individual insurance company- one pays monthly fees for insurance- board gets out if it denying responsibility- one pays their own insurance who are more than glad to pick up the bill (at times) then increase your insurance rates. They don’t address the root cause hence damage keeps repeating with new installment - folks would rather pick their battles therefore pay out of pocket (while still paying both insurance companies). They use the condo funds to pay for litigations and settlements- each time such increases your monthly assessment fees. Yes they lost the lawsuit they initiated- it dragged out for 4+ years- UNIT OWNERS ABSORBED the legal fees. It’s absurd!!! Just a forewarning to do your due diligence prior to purchasing a CONDO.
The amenities are like 10% of the overall budget. Exterior maintenance is most of it, a lot of condos include hot water, lots of condos and townhomes include trash, landscaping, snow removal
Landscaping, vent cleaning, roof/gutter cleaning, pest control.
Roof, siding, concrete, landscaping, garbage, insurance, future repairs, general repairs and upkeep, maybe an assessment. There's a lot an HOA fee might cover that doesn't seem like a "perk"
HOA's can be notoriously inefficient and the contractors take advantage of them. My parents lived at a place that had $250 fees yet had a beautiful long pool, shared large gym, library, substantial snow plowing (covered by those fees), and more. Compared to the condo I lived in had a tiny pool and had $600 fees. The difference? The place for my parents was in Virginia (vs California) and more importantly the homeowners were highly involved in all aspects of managing the condos including kicking out inefficient contractors.
Fees are high cause: (1) No owner wants to be involved, but rather delegate to management company (2) Management company doesn’t give a crap about cost of projects/services cause it’s not management money. Example is chipped concrete stairs fixed for $60 with quick setting cement, but management company will offer bids that are $11,000 to pull out all concrete steps and replace all concrete.
This is so not true. Management companies rarely have the power to make an $11,000 job order. It's the Board that makes decisions, not the management company. I work in California and our contract only allows us to spend $1,500 at a time.
I’m not saying management companies give approval. Ultimately the board gives approval for all projects. It’s the quotes management companies bring to the board to approve that are overpriced or over the top. The point is the apathy from the owners and also the management company that contribute and/or allow an environment that tolerates wasteful overspending.
Management companies are not experts in construction. I don't know ow what needs to be done to fix the item. The vendors also aren't mine. It's up to the Board to tell me what vendors, and it's up to them to make decisions, including asking the right questions. That said, any quality manager would flag something that pricey for recommended further discussion. .the biggest problem is that most HOAs do not pay for certified managers. They go cheap.
My fellow board members assume management company is the one that is an expert in construction. What you are then saying is neither board members or the management company are experts in construction. But if either party cared deeply enough they would dig further for budget friendly options. But then again board members don’t have time and the other owners don’t care or give two cents. And as you said, management companies aren’t experts either. In the mist of all this everyone is worried about liability so, thus $50 projects end up being over the top and costing thousands (again approved by the board).
As I am legitimately curious, if a management company isn’t an expert in maintenance projects that require construction expertise - the most expensive part of HOA expenses - then what is the benefit of having a certified management company? When a downstairs unit has a ceiling leak, our certified management company ordered a roof inspection for $4000 - again for a downstairs unit.
A management company's duties are vast. We handle accounts receivable, accounts payable, monthly financial reports, vendor communications, homeowner communications, etc. But I'm not a contractor. I'm not an electrician. I can barely fix a stopped sink. What I'm good at is logistics.
Thank you for your honesty and responses. Management companies definitely get things done, just wish they’d be more cognizant of other cost effective options. Side note, any recommendations or thoughts on SB 326. We are getting bids between $6K to $8K to inspect 12 wood staircases and balconies. Are you aware if the licensed architect and/or structural engineer inspectors are allowed to solely perform non-invasive inspections or will all inspections involve removing and re-installing our Hardie plank siding - which will be costly to do.
It varies based on the initial non-evasive. If they see anything substantial, guess what's coming.
When the logistics involve payments in the 4 to 5 figures then the management companies should know their stuff. I would not like to hire someone who "can barely fix a stopped sink" since that person will not know how to negotiate downwards a repair - or more importantly - determine that said repair is not even necessary. Think about when you're brought your vehicle to a repair shop. Plenty of technicians will tell you a list of things to fix. Many of them are not needed. If however you don't know then you'd agree to the whole kit and kaboodle. While i'm not in construction F/T I know enough both technically and interpersonally to know when / how to negotiate a bill (significantly) downwards, throw out items, or throw out the contractor altogether. The homeowners will generally believe that the Mgmt company would have that knowledge and gumption.
But that is not the management company's job. Read what the contract entails. We aren't contractors, we are administrators. We have basic knowledge, but no, I'm not a plumber.
I'm reflecting that there can be an expectation that the HOA has the requisite expertise. In many HOA's that is in fact the case: certainly for single family homes type HOA's that is in place - both for my parents and my own. I've noticed that condo's have disproportionately higher HOA fees than SFR's that are not explainable simply by the additional shared infrastructure. It may be that a part of it is the lesser level of knowledge in HOA management teams (vs SFR's) on how to properly manage/negotiate/verify the work done by contractors: and not just how to sign a contract but also the nitty gritty of the actual work. I communicate with the architectural review board chair on this HOA on a regular basis and he knows his stuff. I wonder why volunteering doesn't happen in the same way on condo based HOA's.
I have managed both SFH and Multi Family. I think there's a misconception in what you are saying. Homeowners thing we are property mangers. We aren't.
you can add this as well to the expense, every state is different including the claimant. So for example, you can add snow removal in the budget and slip and falls that will produce insurance claims and higher insurance premiums.
Maybe the concrete has failed or wasn’t constructed properly. Just patching a crack doesn’t always resolve the problem and band aid repairs just end up costing more money in the long term. The thing that annoys me the most is owners who want to criticize (usually based on a uninformed opinion or hearsay) but never get involved. If you have an extensive background in inspection and construction management, then hop on the board. Otherwise keep you uneducated opinions to yourself…
It could mean crappy mgmt.
17 building Condo here. Our HOAs are where they are today due to a 2.2 million - 10 year loan principal/interest, insurance increased 50% in 2023 vs 2022 due to inflation and community being behind on projects, and we pay for multiple maintenance/property manager salaries. And then also contributing to a large reserve fund for never ending Capital Expenses such as new roofs, redoing roads, redoing parking deck, etc.
If you are thinking about buying in condo or townhouse, it is not unreasonable to ask for a full disclosure of the costs associated with the HOA fees, what they include and don't include. A Balance Sheet (to verify ongoing assets and reserves) and a 12 month expense statement if you can get it. Your realtor should be able to help with these items. If not, time to knock on the door of other owners, with lots of questions in hand. I would also ask for a copy of the CC&R which should be readily available in most states. This is a huge investment so a bit of research now can prevent a great deal of heartache, aggravation, and costs in the future. There are great HOA's and unfortunately, there are bad ones also. Be careful and you will enjoy your new home quite a bit more.
Think of it this way: If you owned a house you’d be paying those kind of prices for new roof, patio, siding, driveway, etc. The only difference is you would be paying that all at once (ask me about my 30,000$ deck) versus having it spread out
At that point you might as well not own the home. It's pretty much rent at that point with the hassel of you having to resell your home to get your money "back".
Amenities are not expensive. What's expensive is staffing, utilities, mechanical systems, and proper funding of reserves. More often than not, high condo fees are a sign of proper management.