Ask an Agent: Is There Any Way to Reduce My Condo Fees?

by Mark Wellborn

image

In this week’s installment of Ask An Agent, a reader wonders if there is any way to reduce her condo fees that have gradually risen to be almost as much as her monthly mortgage payments. Coldwell Banker’s Nate Guggenheim offers up some insight.

Question: Is there anything that you can do as a resident to force your condo board to lower condo fees? My monthly fees have doubled in five years, and are almost equal to my monthly mortgage payments, and that does not include special assessments. Any input would be greatly appreciated.

Answer: Unfortunately, you are in a difficult position, as it is very rare for condo fees to be reduced. In a past Ask an Agent column, I described how condominiums are essentially businesses that are operated by a building’s inhabitants, usually with the guidance of a management company.  It is the job of the management company to collect fees and disburse payments to vendors, utility companies, employees, etc.  A management company will also guide the building in keeping up with maintenance - active and preventative - establishing and maintaining sufficient insurance and engaging in some level of bookkeeping.  All that being said, it is the condo board and the condo residents that decide how lean or rich a building will run. Some condominiums are very active in building reserve funds as well as constantly maintaining all aspects of the building structurally, mechanically, and aesthetically.  Other buildings aim to keep fees low and prefer to only raise fees or levy special assessments in the case of an emergency repair or a dire situation.  A building with an operating perspective such as this may have lower fees when you buy/move in, but you might experience a serious jump or a large assessment to accommodate an unexpected expenditure to repair or replace a roof, elevator or major system.

There are other outside factors that contribute to fees increasing. The cost of services increase due to inflation and buildings are forced to pay the price. The cost of trash pick-up, labor, utilities and other necessary services will also go up over time. These are costs that are somewhat outside of the control of the board and the association, though it is always a good idea to shop around for different companies when available.

Over time, your ratio of condo fee to mortgage will absolutely increase. It is probably a good sign actually, as it is indicative of the fact that the cost of everything around you has increased (and we are to assume that your property value has as well), though your loan payment has remained static and you have started building equity (if you have an amortizing loan at a fixed rate).

There are a few things that you should do as a condo owner to make sure that your fees are reasonable and don’t increase against your will. First, get involved. If you had to replace windows in your house, you would go to a few vendors and choose the vendor that best suits your needs. It is no different in a condo, except that there is a committee making the decisions.  Get on the board.  Go to the meetings. If you are paying a lot, find out why. Your eyes will be opened when you see where the fee dollars are really going. It will either be jarring as you discover that you are overpaying left and right for services you don’t need, or it will be helpful to learn that the building will crumble if you don’t pay for that re-pointing project that seems to be eating up the budget.

It is not bad to have a high fee if you are getting something for it. If you have a doorman, four elevator banks and an on-site engineer, you have to pay for these luxuries. If your building is replacing all the windows, the elevators, the stack pipes and plumbing, and the roof, you may be paying a lot but realize that you will essentially have a new building when the improvements are finished. The nature of owning real estate includes maintenance and it can be expensive.  Get involved with your board and association to ensure that you are not being fleeced and you will be fine in the long run.  DC has a lot of fairly young (50s, 60s, 70s, 80s) buildings that are reaching the point of needing major repair work, and it will show in the fee.  Google some condos in older cities that are for sale (like NYC or Boston) and look into what they are paying for maintenance and I assure you that you will be happy that you live here.

In short, it is unlikely that you will be able to decrease your monthly fee (outside of the expiration of a special assessment), but it is paramount that you are aware of and happy with the services that you are paying for month in and month out.  You will sleep better at night if you know where the money is actually going.

If you would like to submit a question for Ask An Agent, send an email to .(JavaScript must be enabled to view this email address).

See other articles related to: dclofts, condo buying, ask an agent

This article originally published at http://dc.urbanturf.com/articles/blog/ask_an_agent_is_there_any_way_to_reduce_my_condo_fees/1454

3 Comments

  1. Jason said at 8:42 pm on Wednesday October 28, 2009:

    I recommend flogging your condo board members on your building’s internal email listserv to start a flame war. Eventually if you are persistent with your armchair criticism of the BoD it will lead to reduced HOA fees.

  1. Jeanne said at 12:44 pm on Thursday October 29, 2009:

    Very comprehensive answer. As a condo owner myself, I echo the section regarding getting involved. If you want to know why your fees are so high, you must go to the meetings and get to know the board.

  1. Chris said at 12:27 pm on Friday October 26, 2012:

    I was reading your discussion from 2009 with regard to condo fees. I own several Condos in south Florida where the condo fees just keep going up and up with no real detailed explanation from the board as to where the money is really going, just general categories with a dollar amount. I’ve painfully attended many board meetings; I’ve asked on numerous occasions for a list of their respective vendors and if they’ve shopped vendors & management in an effort to reduce these expenses with no definitive answers. One of my boards (254 units) just voted “yes” on a special assessment to fight three unit owners with pets (2 dogs, 1 cat) in a “no pet” community at the vocal objection of its members. Legal fees so far are $28,000, which will easily reach $40,000 at the admission of the board before a ruling is made. When asked by a member if they could have fought 1 unit owner at a time, to save on the legal expenses, there was no response. The pets are not being claimed to be service animals by the unit owners.

    My wife and I have been number crunchers for many, many years owning numerous condos and industrial buildings. I want to start a small business that looks at the condo budgets for areas to save on “waste”. Competitively shop its vendors and management in an effort to reduce the unit owner’s fees. Do you think it could be a viable business? Will I meet with resistance and what do you think I could charge for the service.

    Do you think I charge a graduated percent of the savings for years 1-5, if so; what would you propose? I would consult my local authority for licensing, etc.

    Your thoughts would be appreciated.

    Chris & Krystyna
    Florida

Join the discussion

UrbanTurf now requires registration in order to post comments. Register here, or login below if you are already registered.

Click here if you forgot your password.



Ed McAllister

W.C.&A.N. Miller Realtors

703.282.1197

Serving:

Georgetown

AU Park

Woodley Park

Play to hear Ed in his own words

NEW!

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We’ve collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Ballston
Looking to Give People A Reason to Stay Past 6pm
Clarendon
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Rosslyn
Hitting Its Growth Spurt
Shirlington
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
Huntington
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
Parkfairfax
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »

Maryland

Profiles of 14 neighborhoods in suburban Maryland

Annapolis
Small-Town Living in the State Capital
Bethesda
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
Potomac
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
Wheaton
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Hyattsville
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Bloomingdale
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
Brightwood
DC’s Northern Neighborhood on the Cusp
Burleith
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
Crestwood
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Fort Totten
Five Years Could Make a Big Difference
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
Georgetown
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
Kalorama
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
Palisades
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Petworth
Getting a Vibrancy of Its Own
Shaw
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Takoma
Not To Be Confused With Takoma Park
Tenleytown
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

Brookland
New Development Could Shake Up Pastoral Peace
Deanwood
A Little Bit of Country Just Inside the District’s Borders
Eckington
Not to Be Confused With Bloomingdale
H Street
A Place To Party, and To Settle Down
Langdon
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
NoMa
Evolving from a Brand to a Neighborhood
Rosedale
Ripe for Investment Right About Now
Trinidad
The Difference 5 Years Makes
Woodridge
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 'hoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Hillcrest
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾