July 2021
Those resisting condo fee increases often fail to recognize their inevitability. More than 90 percent of condo building expenditures are fixed. While some expenditures can be delayed this comes at a cost. Avoiding undesirable consequences requires a commitment to spend money before problems escalate.
Unpalatable as condo fee increases are, they are the only way for a condo board to fulfill their fiduciary obligations.
Costs increase each year for reasons that include inflation, wages, taxes and wear. Only regular maintenance and replacement of components can prevent the condo home from falling into disrepair. There is no option but to pay these increases if one wishes to continue living in their condo home.
Annual increases of at least two to five percent a year cannot be avoided without cutting back on necessary expenditures. There must also be a cushion for those unexpected repairs that come up with regularity and continued funding of the reserve fund.
The goal for a condo board is to keep ahead of all this which means planning. Plan to avoid large condo fee increases and special assessments. Achieve this with consistent small annual increases owners can incorporate into personal budgets. Take steps to ensure the reserve fund is at an adequate level to pay for all anticipated expenditures.
Condo fee increases are an inevitable reality. The choice is between small manageable annual increases or greater infrequent increases owners have difficulty absorbing.
