The pandemic has impacted on condominium corporation finances.
There has been a loss of revenue. Guest suites and party rooms have been closed. Revenues typically received and used to pay for corporation expenses are unavailable. Communities need to reduce expenditures or raise condo fees to compensate.
Insurance increases are ranging from 10 percent to 30 percent over the past year.
Pandemic-related expenses unlikely to have been budgeted for include personal protective equipment such as plexiglass barriers for lobbies and security areas. Costs of cleaning supplies, cleaning services, and security services have likely increased.
The greatest cost increases come from utilities. More people at home during the day use more water, electricity and gas. Cost increases ranging from 10 percent to 40 percent – possibly $200,000 or more annually – are typical in a high-rise building.
The reality is that many condominium corporations are raising monthly condo fees to cover financial deficits. Some, those lacking a financial cushion, may require a special assessment to more quickly replenish their cash account.
Communities with an unused surplus from prior years are in a stronger position to pay their expenses without raising condo fees or a special assessment.
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