Be aware of HOA fees & what they provide
High-rise living can provide amenities, personal service with a lock-and-leave lifestyle, and covering these costs comes from the homeowners association (HOA) fees.
Being familiar with HOA fees and charges is an important part of budgeting. Though there aren’t any average HOA dues, factors vary from universal expenses shared by the residents and can be charged by the square footage of a unit.
It’s also not uncommon for HOA fees to increase slowly as certain fixed costs of a building increase in price. If a substantial building repair is needed, residents could see either a rapid increase in dues or an added assessment fee.
Knowing about an HOA’s reserves is also important to inquire about when making a high-rise purchase.
Rosemary Hoyt, a Realtor with Martha Turner’s Sotheby’s International Realty, said some dues are paid monthly and some yearly. Homeowners will typically have a choice. Dues vary, and it’s important to research when choosing a property.
“Ask what are the amenities and what are the fees,” Hoyt said. “Absolutely do your research. The reason you’re paying is because of the maintenance of the building. You no longer have to do yard maintenance or worry about the roof or windows. That’s where the dues come in. For older people, it’s ideal. It’s a set fee.”
Research also should include the property’s history as well as projected maintenance or remodeling, which could affect additional fees, Hoyt said.
“If buying in an older building with serious maintenance problems, you’re taking a chance. With a new building, this isn’t a big issue,” Hoyt said.
Investopedia.com’s article, 9 Things You Need to Know About Homeowners’
Associations, reported that all residents of condominiums and townhomes must be equally responsible for maintaining the common areas such as landscaping, elevators, swimming pools, clubhouses, parking garages, fitness rooms, sidewalks, security gates, roofing and building exteriors.
Kristina Houston, a Realtor with New Leaf Real Estate, explained that HOA fees are actually good because they help ensure the building is being maintained and record common rules and regulations that all residents should abide by.
“HOA management is what makes possible lock-and-leave lifestyle that’s so desirable,” Houston said. “They replace many maintenance costs of a single-family home and insurance costs are generally lower as you are insuring walls-in and content/possessions only.
“Renters do not pay for the HOA fee in a privately owned condo or high-rise community; this is covered by the homeowner.”
Knowing the important questions to ask is imperative to making an informed decision if choosing to move to a highrise.
Houston has several recommendations what to ask when it comes to HOAs. These include topics on how many units are owner-occupied, the rules and regulations of the building, restrictions on renting your unit and weight limits on pets.
Also being aware of certain financial information regarding HOA dues or fees is being prepared for any unexpected surprises, Houston said. She advises asking questions like these:
How much does an association keep in the reserve account? What does the monthly fee cover? What is the financial responsibility of the HOA versus the homeowner?
“This varies by building such as for instance, the windows,” Houston said. “High-rises have double-pane windows that lose their seal over time. When they do, is this the cost of the owner or the HOA? Also is the HOA or condo building in litigation? If the builders or homeowners are in a lawsuit, it can quickly deplete the reserve account.”