April 2024
There can be strong support for keeping common fees low. Yet, what is the point if this leads to a financial crisis?
If your community isn’t setting aside adequate reserves for common elements in your building, what is the long-term plan for maintaining major expense common elements including windows, siding, parking areas and sidewalks? When the community falls into disrepair, the only remaining options if the home is to be maintained are special assessments or a condo loan every time major maintenance or repairs are necessary.
While there is great appeal for keeping condo fees low, this makes no sense if it leads a community down a path to financial ruin. A condo board failing to maintain, protect and enhance common areas is not fulfilling their obligation. Choosing to keep common areas in a state of disrepair because financial resources are inadequate is a poor way to ensure a community remains financially viable. Those currently happy with low condo fees will soon sour when things start to break down and don’t get repaired.
Problems arise when the owner mindset focuses on avoiding necessary fee increases regardless of the outcome. There can be a perception that potential buyers prefer low fees over a property that is in good condition. This short-sighted perspective offers no solution other than for individual owners to sell and move before walls come crashing down, hot water becomes a luxury and water leaks flood their home.
A better approach is to raise common fees and build an adequate reserve fund to handle known, upcoming expenses. Special assessments should be reserved for major, unforeseeable expenses.
If the board isn’t adequately representing the best interests of the community, owners must be prepared to nominate and elect candidates to the Board who will do a better job of managing the common elements, and that includes creating a fiscal strategy that addresses financial shortages.
When a major storm is just over the horizon, you probably don’t want to be an owner or resident in its path. Putting off for tomorrow what needs to be done today is a slippery slope.
