Condo Fees In a New Development

[newcondo]

What is the name of your state? Maryland
There is a really nice condo from apartment conversion I am interested in buying but the condo fees seem a bit high (294) I know since the fees aren't voted upon yet and these are what the developer expects the cost to be to run the clubhouse and reserves, how is this amount derived? I ask because I plan on joining the board(when it is formed) and being as competent and stable as a good assoc. should be! The developer says this is an estimate and may go lower or even higher but its just breaking my wallet and estimated mo. payment, how can i find out info on HOA expenses?

 

[newcondo]

Oh the same for the property taxes as well....

 

[seniorjudge]

Q: how can i find out info on HOA expenses?

A: Ask the HOA.



Q: Oh the same for the property taxes as well....

A: Ask the county tax collector/assessor.

 

[LindaP777]

The developer says this is an estimate and may go lower or even higher but its just breaking my wallet and estimated mo. payment, how can i find out info on HOA expenses?

If you are afraid of the fees going up, or can not afford more then don't buy! I personally have never seen condo fees go down! Property taxes go down on occasion when property values have gone done or were previously over assessed. You don't want to get in over your head.

 

[Paddy Reagan]

The developer says this is an estimate and may go lower or even higher but its just breaking my wallet and estimated mo. payment, how can i find out info on HOA expenses?

Most states require that developers offer a prospectus or other documentary package to prospective buyers. In addition to the Declaration of Condominium and By-Laws, the package usually includes an estimated annual operating budget. This budget total is divided by individual shares based on the square footage of each unit to determine the monthly maintenance fee for each unit. This information should also be included in the prospectus. These factors and others are considered so critical for buyers that many states require receipt of a copy by the buyer prior to closing and offer a right of recission once it is received.

Your research is more important than you may imagine. Here's why: Developers of new construction and coversions ALMOST NEVER provide adequate funds in initial budgets to properly operate the building. Early owners rarely realize there's a problem because few of the units are occupied and none of the facilities are operating at full capacity. As the building fills up and the point of turnover is reached (when the developer turns the association over to owner/directors) reality sets in and budgets escalate.

Why would developers behave in such a way? Because lower fees make units easier to sell and every dollar not set aside in a buyer's budget for maintenance can be added the price of the unit.

One other bit of warning for conversion buyers: Somewhere in the prospectus or other documents required to establish a condominium, there should be a Statement of Condition for the building. Usually, an engineer or architect inspects each element of the building (roof, structure, heating & cooling, etc.) and provides an estimate of life expectancy, remaining life, and approximate cost of replacement. Take a very close look at this statement. The bright new building may be covered by a roof that will require replacement in three years with a huge special assessment to cover the cost.

My advice here is not offered to frighten anyone away from buying a condominium. For some, it's the only logical, affordable option. But, I'm suggesting a maximum amount of research to learn what you're buying and the real cost once you've made the committment.

 

[newcondo]

Dag Paddy you are "thee" greatest! I which you were on any condo board I lived under!! You make a good point that the condo fees are probably lower than what it will take to run at full steam and that it is also to help interested buyers think its affordable! I think I will wait a bit or maybe even take the risk if i feel that investors urge... but probably i will pass on this and keep looking or wait until i can afford something similar. But I will also check the report in which u stated had the life expectancy report which i never knew existed!(good advice there guys) because although the insides are gutted out and all pretty the outside is very important and I cant even see the roof it may be a disaster waiting to happen!