Raising Maintenance Fees A Necessary Evil

They say the only two inevitable things in life are death and taxes. Well, for condo and co-op owners you can add a third—maintenance fees.

As long as roofs are going to have to be repaired, snow is going to have to be plowed, and grass has to be cut, unit owners and shareholders are going to have pay for their share of the cost for maintaining the property where they live.

For the most part, HOA owners know that maintenance fees—and maintenance fee increases—are part of condo and co-op life, and rarely go about staging a coup when the board raises fees. However, boards should take proper steps when increasing fees, keeping their community members informed of fee increases and making clear what the money is for.

Fee Basics

According to Jules Frankel of Wilkin & Guttenplan, an accounting firm in East Brunswick, monthly maintenance fees cover three things: operating expenses for the year (including snow removal and landscaping), management fees, and insurance.

In addition to those purposes, Frankel says associations often set aside additional money in case the association goes over budget. This is known as a replacement or reserve fund, and is used, for example, to cover snow removal during a particularly tough winter.

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6 Comments

  • can condo fees be raised to make up the monies that other condo owners do not pay, and if the monies are collected on the lien shouldn't the owners that paid the increase be paid back?
  • I BOUGHT 8 YRS. AGO. I WAS GIVEN THE DOCUMENT SHOWING THAT THE PREVIOUS OWNER WAS IN GOOD STANDING, THE AMOUNT OF THE MONTHLY FEE, AND NO INDICATION THAT THEY PLANNED TO RAISE IT BY 100% AFTER MY PURCHASE....I NEVER PAID, AND THEY WANT TO FORCLOSE. I HAVE PAID THE AMOUNT I AGREED TO PAY EVERY SINGLE MONTH FOR 8 YRS. THEY ARE HARRASSING ME, BULLYING ME, AND DRIVING ME CRAZY...I BELIEVE THAT THE FEE MUST BE RAISED SOMEWHAT EACH YEAR, BUT FOR THE SAME OR SIMILAR BUDGET, 100% IS OUTRAGEOUS...
  • How long should a board give prior to giving a maintenance increase?
  • I just received my new payment booklet which shows an increase in dues of $7.50, which in the scheme of things isn't all that much. However, I never received a proposed budget or any indication that the dues would be raised prior to receiving my new payment booklet. There are only 62 units and no amenities except for the electric gate and entry landscaping. My only real concern is that I am on a fixed income and cannot really afford to have my dues increase every year. Right now, they are 1/2 of my mortgage payment. Our by-laws/Declarations state that should the membership disapprove the proposed budget (which I didn't get), the current budget would remain in effect for the following year. How do we address this issue without raising the hackles of the Board or Management Assoc.?
  • Official notice of proposed budgets and, once passed, of increases in association fees, via postal mail to insure that all unit owners are duly notified, should be a law. 60 days notice of a proposed budget; 30 days notice for increased association fees. Otherwise coop/condo boards, such as mine, don't bother to let you know, or vote on increases in executive session, barring shareholder input. Laws regulating these issues would have to upheld regardless of who is on the board. If your board doesn't inform and communicate, lodge a complaint against current board members with the department of community affairs. They may not be able to actually do anything, but the information will be out there.
  • our Board raised our fee's 3 times in under 2 yrs!!! this is not right and we are talking a raise of $85 in that time, our Building are relatively new all under 8 yrs old, I see NO reason for this, we have ppl with mortages and on fixed incomes who cannot hold on if this is the future of this greedy Board and management, they also FINE the crap out of us all for Petty things, Terrible