Before we talk about condominium fees, let’s first define what makes a condo a condo.
A condo development or community can actually take on many physical forms. Some condo developments are set up like apartment style units. Others look like townhouses or even a converted property that was once a single or multi-family dwelling. What makes a condominium development different from other multi-tenant structures is that a developer has legally declared that that the development is a condominium community. Most state have special rules that are designed to regulate condo developments, and because of this, there must be a legal declaration by the developer that the units are, in fact, condominiums.
What Are You Actually Purchasing When You Buy a Condo?
When you purchase a condo you purchase the title to your individual unit. Legally this includes everything ‘up to the walls’ but not including them. Some people refer to condos as ‘boxes in the air’. Common areas of condominium communities including the dividing walls, the stairwells, outer walls, pools etc; these areas are all shared under common ownership. Each individual owner shares an ‘interest’ in these spaces and with that comes a responsibility to share in the maintenance of those spaces.
Buying A Condo
When you buy a condo you will have to pay common fees associated with any real estate purchase such as the down payment and closing costs on your loan, as well as any other fees associated with procuring the loan. You will also be responsible for paying property taxes on your new condo, as well as fees that will be owed on a monthly or yearly basis to your condo association.
What are Condo Association Fees?
Condo association fees are the shared fees that each individual owner must pay towards the upkeep, maintenance and repairs
of the common areas. These fees are different for each condo development, which is why it’s important to request information about fees before you ever make an offer on a unit. Some developments have relatively low association fees, while others are much higher.
Each condominium association determines its fee schedule based on a wide variety of factors. Some of these include calculations related to how many units are occupied, typical operating expenses for building maintenance or repair, as well as how large each individual unit is. Developments with many amenities will probably have higher association fees than smaller developments with less common areas.
Special assessments are fees charged, usually on a one time basis, to pay for unexpected repairs, needed renovations or other unplanned expanses. These costs are split amongst all owners and are equally shared. Assessment fees are unpredictable, and every condo owner will probably be faced with them at one time or another, however, before buying a condo it is appropriate to ask if the condo association keeps a ‘reserve fund’ for unplanned expenses. Associations who save money in a reserve fund are less likely to have to go to residents for special assessments should unforeseen circumstances arise.
For more information on the buying process including a current Myrtle Beach Market update click here.