P.F. (Pennsylvania) asks: "Kay, my condo fees keep going up. I'm on a fixed income. I won't be able to afford living here pretty soon!"



Dear P.F.: Owners in every condominium association are concerned with changing fees. Condo fee changes are normally up, not down, and they change on a fairly regular basis. People who buy condominiums look at the fee at the time they are buying. But they might not know that the amount will probably increase from year to year.

The explanation could be for any one or more of these reasons:

Fees may have been low when the developer was in control in order to sell the units quickly.

The association will have to pay for services that the developer performed at no charge.

There isn't enough money to do a big repair job.

There wasn't enough money in the budget.

The condominium association found that costs of materials increased for maintenance, repairs, and replacement.

Costs of services such as trash removal, landscaping, and snow removal increased.

Costs of administrative fees increased for the condo association's attorney, accountant and management company, to name a few.

Is it possible to eliminate condo fee increases?

Because fees fluctuate depending on changing expenses and inflation, probably not. It's no different than how your expenses would change if you were in a single-family home.

Is it possible to minimize the increases in condominium fees?

The condominium board of directors can research costs of materials, services, and professional fees in advance of planning the budget for the next year.

The property should be inspected regularly by the condominium management company and/or board to stay on top of aging of the buildings, grounds, and recreational facilities.

The condominium board and/or management company should schedule routine maintenance programs in order to increase the association's life expectancy. These programs will also reduce surprises!

The condominium board or management company should put off the repair or replacement of an expensive item until it is put out for competitive bidding.

The board of directors should have a professional company prepare a condominium Reserve Study. This study shows the costs of repairs/ replacements for the various parts of the property over the next 10-20 years. It includes charts indicating how much should be budgeted each year. Inflation is built into this study.

Decreasing or eliminating the services provided to the residents is another option. This solution will not be popular!

Can the condominium fees remain unchanged?

Utilities may be turned off if the bills are not paid.

Having to fight to get paid will cause the contractors to be reluctant to make repairs.

There may be deterioration of the buildings and recreational facilities and costs of repairs could increase because routine maintenance was abandoned.

The difference in the cost of the remedy would need to be made up by the association in the case of a disaster if the property is underinsured.

There could be so much disagreement among the board members over which bills to pay that owners might not want to serve on the board.

A condominium maintenance fee is a "living" expense and changes should be expected. In the real world, costs constantly adjust as expenses for products and services change. Even though your condo fee changes, it will probably be only once a year. The bottom line is that you should want your fees to be high enough to maintain the complex as a first-class condominium.