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Condo Maintenance Fees Explained: What's Covered, How They're Calculated, and Special Assessments

What Monthly Fees Typically Include

CategoryComponentsNotes
Common Area MaintenanceLobby, hallways, elevators, pool, fitness, landscaping, snow removal, hallway lighting, cleaning contracts.Largest line item (often 40–60% of budget).
Building Insurance (Master Policy)Property coverage for structure, common elements, liability. Does NOT cover unit interiors or personal property (need HO-6).Premiums rising sharply in catastrophe-prone areas.
Reserve Fund ContributionsMandatory savings for major capital replacements: roof, HVAC, elevators, plumbing, façade, paving. Funded per reserve study (typically 10–30% of fees).Underfunded reserves = future special assessments.
Utilities (Common)Water/sewer for common areas, gas/electric for hallways, garage, pool heat, clubhouse.May be submetered per unit in newer builds.
Management & AdministrationProperty management company fees, on-site staff (concierge, engineer), legal/audit, office supplies, software, meeting expenses.Typically 10–20% of budget.
Professional ServicesEngineering inspections, reserve study updates, legal counsel, tax prep.Periodic, not monthly.

How Fees Are Calculated

  • Percentage Interest: Based on unit’s % of total building value/square footage (per declaration).
  • Equal Share: Each unit pays same (rare, usually small buildings).
  • Hybrid: Base + variable for parking/storage.

Special Assessments

One-time charges for unbudgeted major expenses (e.g., facade repair, boiler failure, litigation settlement). Allocated by percentage interest. Can be $thousands to $100k+. Review reserve study & meeting minutes before buying.

Red Flags in Financials

  • Reserve funding <70% of recommended (per study).
  • Frequent special assessments (poor planning).
  • Fee increases >5% annually without clear justification.
  • Delinquency rate >5% (impacts cash flow).
  • No recent reserve study (should be every 3–5 years).

Buyer Due Diligence

  1. Request last 3 years’ financial statements, budgets, reserve study, meeting minutes.
  2. Compare fee trajectory to inflation + comparable buildings.
  3. Ask about upcoming capital projects.
  4. Verify master policy coverage limits & deductibles.

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