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Our condo HOA monthly fee is $950. It was $700 when we purchased in September 2018. All of the increase was higher costs associated with upkeep and maintenance, not improvements or added services.
Now it’s likely the increase in July will be 7.4% to $1,020. ($840 a year).
Annually the increases averages 4.82% since 2018. For reference the annual rate of inflation since September 2018 was about 3.65%, but that is not directly applicable to running a complex of nine buildings where repairs are needed on everything from elevators to fountain pumps.
The complaining and criticism have already begun. Imagine 108 senior households agreeing on spending money – the tennis court needs repair (I don’t play tennis) – building one needed elevator repairs (I live in building 3). Why do we need a full time property manager? etc., etc. We are also prone to wanting things done when and how we want them done and often critical when they are not.
Above all is the desire to maintain property values, but that may not be the priority for some who did not plan or consider increasing fees. To be sure, HOA fees offset building and outside expenses of owning a home and they pay for added amenities like a pool, tennis courts, etc. However, owners still have property taxes (around $14,000 a year) homeowner insurance, HVAC maintenance, repairs and replacement, interior painting.
Nobody who lives in this community paid less than $500,000 for their condo even going back to 2011 when it opened. I know because we looked at the models back then and concluded we couldn’t afford to buy. The last unit sold for over $900,000 (there are different sizes).
It will be interesting to see who wins this HOA debate. Will it be the short term, $840 more annual expense view or the longer term maintain all necessary and desirable services and values view?
I would not suspect that a $840 a year added expense would be significant for families living here, but that may not be accurate, it may depend on the income versus net worth dilemma.
One thing for sure, the cost of living always goes up. Why are people, especially retirees, often surprised.
I can see why people might be getting a little upset over the increase in the HOA monthly fee. It’s approaching, in some instances I imagine, what they pay in property tax. The difference is that the HOA fee is directly re-invested in the place they live, while the property tax is not.
I don’t like paying $100 for an oil change, but it preserves the value of my car. I am less fond of paying $6000 for a new engine. Sometimes you need to pay a little (relatively) now to avoid paying a lot later. But some people are more about limiting the monthly budget than protecting/enhancing the long-term value of their assets.
True in some cases, but if you can buy a $900,000 condo in one of the wealthiest town in Nj, perhaps the northeast, you likely don’t have a limited monthly budget – or shouldn’t.
We moved into our condo after years of home ownership. The HOA experience has been eye opening. I reviewed the financial statements of the HOA prior to our purchase. I thought I knew what I was doing There were reserves. Were they sufficient? Contingent liabilities and deferred maintenance were not apparent. The owner of our unit had passed away before we purchased, and the heirs offered no meaningful disclosures. The condos were built about 30 years ago. We had an inspection done and minor issues were resolved. Less than a year after purchase, we attended the annual HOA meeting held at the end of our driveway. The major topic was a roof replacement that would require an assessment of $12000. The roofs had never been replaced. I wrote the check. I wasn’t happy as if I had known about the projected assessment, I would have negotiated with the condo owner for a price reduction. Our monthly fees have increased, but costs do go up.
Ha, that’s nothing. Here at the retirement village, we have to maintain 200 acres of lawns, and we own 57 roads we have to pave and plow. We also own the sewers and water mains.
The big thing now is the roofs, and how to replace them. Some roofs date from the 70s! There are 929 units in about 400 buildings, and it would cost about $15 million to replace the roofs. The monthly meetings are a riot, and I am not speaking metaphorically.
The people who moved in 30 years ago were middle class, and now wealthy people are moving in; this creates enormous conflicts between people who are running out of money and people who want luxury amenities. However, a roof without leaks is not an amenity, so something has to be done.
As Treasurer of the village tax district, I spent the winter approving invoices for snow removal. Our budget was $40K, but we spend $140K – ouch! Fortunately, we still have the capital to pave 2 roads this year, and two roads next year, as the residents on the worst road continue to complain, while those whose roads were paved last year complain about something else.
Many residents just don’t get communal living.