My Neighbors Pay Lower Assessments – What’s Up?

Sometimes owners compare the monthly assessment in their communities with the neighboring properties (or not so neighboring) and find out they are paying much more. This, of course, is frustrating. Here is an email I recently received:

“I have to ask you. Have you ever heard of $500.00 per month fees for a 1980 built condo that sells for around 200k and has carports, community laundry rooms, etc? This seems absurd to me as top end neighborhoods in this area have hoa fees around $300.00 per month. … this is a monthly increase for the next 15 years.”

Ouch. $500 per month assiessments for this kind of property sounds like a lot. However, the assessments in one community may be higher for various reasons. The following examples are an indication of how one community might handle a difficult problem and another might do something very different.

1980 community – 100 units – assessments are $200 per month – and the buildings need new roofs and paint. In the course of getting estimates, is told that the siding is beginning to fail too, and probably won’t hold paint. Board finds out that the reserves are inadequate by a half a million dollars.

Community One: Seeks approval of members to get a loan, and pay it off with a special assessment over about 7 years, with a monthly special assessment of an additional $450 per month per home.

Community Two: Seeks approval of members for a one time assessment of $25,000 each unit. Owners are on their own to find financing. The benefit is that the monthly assessments stay the same.

Community Three: Seeks approval of members for an increase in the regular assessments from $200 per month to $500 per month for more than 7 years.

Each of these options have pros and cons relating to capability of members, marketability, etc. And the differing payoffs have quite a different effect on the monthly “assessments” that owners pay.

Another factor might be the type of development. Condo association assessments tend to be higher than in townhomes because the association pays for more maintenance, even though the two types of developments might look very similar.

Many common interest developments built around 1980 are in need of major repairs and many of those have inadequate reserves so my best guess is that the higher costs are related to something having to do with reconstruction or repairs. But I could be wrong.

  • Share/Bookmark

Sorry, comments are closed for this post.