Monthly condo fees and co-op maintenance are important criteria when judging the value of a potential new home.
Everyone wants them to be low enough to conform to their budget. However, the pitfall can be when they are too low.
Those monthly charges to shareholders and owners are what keep a building running right.
Depending on the building, they cover such costs as heat and hot water, the maintenance of common elements such as the lobby and any outdoor spaces, snow removal, exterior upkeep and repairs. Sometimes cable-tv and electricity are included.
Amenities such as gyms, saunas, swimming pools and basketball courts substantially add to those costs.
Labor is a huge component of a building’s expense. Consequently, so-called white-glove buildings have much higher fees than more modest ones, but pre-war buildings with their aging infrastructures don’t necessarily levy more charges than do new developments with their extravagant amenities.
Another critical part of the budget and each resident’s share of it has to be the reserve fund. Feed it too little, and special assessments are bound to follow.
Is there enough cash in the fund to cover a boiler conversion to environmentally acceptable oil, to replace a leaky roof, to undertake an overhaul of the electrical or plumbing systems, to defend the building against a lawsuit, to account for a leap in property taxes or of the price of oil?
Not only do sufficiently high fees protect against a financial jolt in the form of a special assessment for months to come, but they also protect the value of the building and thus of its apartments.
Although the saying goes that death and taxes are sure things, know that monthly fees rise year after year as predictably and certainly as spring follows winter.
Tomorrow: Don’t blame Canada
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022