A good condo association is crucial to maintaining your condo’s value. A condo owner owns the space between the unit’s walls; the building itself and any common space are held by the condo homeowners’ association. As an owner in a complex, you will belong to its association and pay a homeowner’s fee. The condo association will cover expenses to insure and maintain the property, so it is important that it is professionally managed and has the condo reserve funds to make needed repairs. The type of fixes can vary widely, from fresh interior paint in the common areas to a new roof, so a condo association’s reserve funds are important.
“If you don’t have good management on-site or adequate [financial HOA reserves], the probability is, if something small happens, they will overlook it. It might be landscaping or a small crack, but if you overlook those things, greater problems will tend to occur,” says Maurice Veissi, a regional vice president for the National Association of Realtors. “That will detract from your condo’s value.”
Take a good look at the condo association’s budget, because this will help determine the services you will receive, and the special HOA assessments you will be charged. Assessments are generally mandatory and collected monthly, quarterly or annually. If you don’t pay these fees, a HOA lien may be placed against your property. Find out what the HOA assessments cover and don’t cover (for example, maintenance of common areas and trash collection), and see how these assessments compare with similar condo associations in your area. The condo budget should have a reserve fund for major expenditures. If not, condo owners may be hit with special HOA assessments for major repairs.