Examining Assessments and Increases Sharing the Costs

Owning a condo or being a member of a homeowner association is a something many New Jersey residents know a thing or two about. In 2004, the National Association of Realtors (NAR) estimated that 970,000 existing co-ops and condos were sold in the U.S. last year—up eight percent from the year before—and the New Jersey market has consistently mirrored growth on the national scale. Since more and more people are turning to condominium and community association living, it's important to understand what costs are involved beyond the initial down payment.

A huge factor in community association living is the monthly maintenance fee or common charges that residents pay. Each association must examine how they manage increasing maintenance fees as well as special assessments and other common element charges. Even though fees tend to increase with time, with proper planning, transparency, and consistent communication, periodic increases don't have to be painful surprises—for the board or the association members.

High-Maintenance

Common charges or maintenance fees, usually paid on a monthly basis, are charged to defray each resident's share of the utilities, regular upkeep, management, administration, shared amenities, and insurance for their co-op or condo community. The fees also help support common areas like parking facilities, hallways and lobbies, the roof, and recreational spaces. Clearly, to maintain an efficient operation, maintenance of all of these parts is essential. Not only does upkeep maintain (or improve) the quality of life for all the residents, but it's simply the responsibility of all who call the association home—cooperation in multi-unit living is the name of the game, after all.

Also, it's important to remember that regular building maintenance helps everyone's property retain value. Well-maintained homes sell more readily and bring a higher price when put on the market, and regular maintenance helps keep the little costs that spring up from time to time from becoming much larger ones later on.

How Much to Pay?

Of course, maintenance fees and common charges depend a great deal on the size and location of a co-op or condo. If your condo has a pool, a recreation center, a party room, two parking garages and a staff of 50, residents' monthly fees will be considerably larger than a building that has one doorman and no courtyard. Taking a look at these kinds of charges is a must for anyone shopping for a multi-unit living space—and understanding how a board arrives at its level of maintenance fees is important for homeowners.

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Comments

  • I live in a small condo in New Jersey. It was converted to condo in 2002 from a 13 unit rental property. In New Jersey is there a specific law that dictates what % of the monthly common charges be set aside as a monthly contribution to the reserve fund?