Condo Association Fees?

Question

I found the perfect all- brick townhome in north florida. The price is right; the community is developing; the schools are okay - everything is perfect, except for the condo fees!

Right now, there is a $200 fee; however, I have been told that the fees could get as high as $400 a month, an amount that I could not afford with the mortgage!

I need to know what can I do to combat the HOA fees?

Secondly, can I purchase a townhouse, where I can PAY my own taxes, and cover the maintenance myself?

Answer 1

I believe that any townhouse or condo association will always have a tax portion in their fees. Your own personal homeowners insurance does not cover common areas and management insurance (d&o). Also, much of the maintenance is performed on common areas - landscaping, pool maintenance, snow removel (in the other areas of the country), etc.

Answer 2

Complex question. The HOA monthly fee needs to cover a lot of different costs. If you own a unit, you cannot "combat" the fees. In fact, in many U.S. states, unpaid HOA fees can become a foreclosure on your unit to collect the unpaid fees. Not everywhere, but it does happen.

It is highly unlikely that the fee will double at one time. More likely the fee will rise at an unreasonable yearly rate. The question is why? The Association is not a for-profit company. It's a pass through association. They collect the fees to cover costs plus build a little cushion for unexpected expenses.

Your greatest fear here is you buy a unit thinking you know what the monthly fee is. Shortly after closing your purchase, you learn there are serious structural problems that have been ignored for years. The result goes like this: The Board tries to ignore their plight as long as possible. One day they wake up. The Board makes the hard decision to repair the entire project, but there's no money in the savings account. Result: a special levy on each unit in the entire project. That levy can be thousands of dollars. This is what you really need to look into. (This is a true story; friends are in such a project near the Trump Natl Golf Course - Los Angeles. The pipes throughout the buildings are coming apart. There are leaks all over the place, especially in the ceilings. The Board tried to put bandaids on the troubles for years.)

Lastly, there's a difference between a "condo" and a "PUD" (planned unit development). In a PUD, you basically pay the property taxes on your own unit. The Association pays some property tax on the "common areas." In a PUD you are fully responsible for the interior of your unit. The Association takes care of the building exterior including the roof over your unit. These are typically called "townhomes" not "condos." Ask the question, is this a condo or a planned unit development. The Realtors can see it in their listing data.

Answer 3

There is no standard or typical amount; this will vary a lot between associations. Your best bet would be to visit the properties you are interested in, and chat up a resident about this. They will for sure know how much they pay in fees. Also, if you look on the MLS listings for units in your targeted communities, the listing will most likely specify the amount of the fees. It is good that you are thinking of this at the front end of your process so you can plan for it, rather than be surprised at closing.

Answer 4

If you consider the HOA fee, theres not much diferent from buying a house, the condo +HOA+you get a higher rate for being a condo.
Aim at a house or duples
Plus HOA is not as dedcutible as the mortgage pymnt.

Answer 5

You can go to association meeting and object to the fees but it won't do much good.