Condo Association Management Blog

If this is your first foray into Florida's HOAs and condos, I suggest you find places you like, and look very carefully at the financials, the reserves or funds, the delinquencies (if you can get that info) and talk to other owners. The realtor if you use one does not always have your best interests at heart. Low fees don't always mean you are getting a good deal. Our hoa bragged for years on how low the fees were but what they didn't tell you was they were not able to set funds aside for future replacement of common assets and now they are hitting owners with huge special assessments for failing roofs, roads, irrigation, insurance...all because they went cheap and paid for things as they went along. Do your homework carefully. You get what you pay for.

Condominium Association Fees are not the same as HOA which are Home Owner Association fees; different Florida statute. 
 
As well as comparing the fees you need to compare what you will get for the fees. Not all provide /include the same items or to the same standard. Also look at the Condo Association's Reserves account to be sure the deferred maintenace items are adequately provided for. Good luck.

If you search for condominiums or HOA's by the lowest fee, be prepared at a later date to open your wallet.  
 
What you need to do is assess what you can afford per month. A large part of condominium living is a lifestyle choice. If you are a DIY person, then traditional condominium living may not be for you. However, a site condominium (detached) or an HOA may be more your style. 
 
However, your question is to look by fee. First, assess what you can comfortably afford per month or year, allowing for reasonable increases. Second, look at the age and maintenance of the community. Third, ask to see financials. See if they have a reserve study or long range planning to pay for capital items such as the roofs, roads, clubhouses and any other responsibilities or amenities. Often, communities with lower fees are not putting away for the future. You are attracted to the lower fee. Shock, frustration and anger set in when suddenly, the roof or road needs to be replaced and you have to write a check for $5,000. If a community is well maintained, has a good plan for capital expenses and has a well established reserve fund, that $10 or $20 extra per month (if you can afford it) will probably be worth it. 
 
I compare it to shoe shopping. Sure, you can buy cheaper shoes. But how often are you replacing those shoes? 
 
I hope that your real estate agent is assisting you with this and pointing these things out to you.

This question makes me think there should be a governmental condo agency that keeps tabs on how much each condo charges for fees, what is included (utilitiies, etc.) how much is in the reserve fund, when maintenance was done, the name of the management company, whether there have been any assessments imposed, how many units are rented out, how many are in arrears on their HOA fees, etc, which would be updated on at least on an annual basis. It is simply too difficult for a prospective buyer to gather in the condos under review. this information should be available and well run condos should not object. In fact, it might help to keep condo associations on their toes. Each condo could receive a rating, such as A, B, C,D, depending on how it measures up, so a prospective buyer could see at a glance which condos are well run and which ones are in trouble.

Low condo fees can be a source of future major pronlems. They coulkd be indicative of inadequate reserve account funding or simoply lack of adequate budget preparation which forms the basis for the condo fee.

I resent you saying Realtors don't have buyers best interest..look for a realtor through friends or referrals.

Kris, no insult intended to you (especially since I don't know you) or anyone else within or outside the real estate business. It is not a blanket statement. As with any profession there are many more good honest people than there are not so honest people. Realtors are hampered by not knowing what the Boards are planning to do. But, we have had [some]realtors tell buyers in our HOA some untruths about how fees and special assessments work, how much were in our reserves, etc. We have had many closings where the governing docs were not given to the owners. The realtor definitely has a hand in that not happening.  
 
Thanks for listening. I did not make the comment to start WWIII about realtors, but for making the point that buyers must understand that they are signing the contract and are ultimately responsible for knowing what they are getting into, regardless of what advice was given. I apologize if you misunderstood my comment.

Louise: I am with you. This should be public information so when others are looking to buy, they have the "big picture". I can get police stats on crime, school district information, my banks financial statements, etc, but I can't get information on the financial stability of the HOA.

You are "looking for love in all the wrong places" to quote Mickey Gilley. Fees are a function of the size of the complex, the size of the grounds they occupy, the extent of amenities, and many other variables. Low fees for your area are, most likely, indicative of something being neglected, which usually means little or no contribution to the reserve account.

Louise and Nancy: Are you serious? You think we need more governmental programs to monitor condo associations? If anything will drive dues up it would be the cost of having a bloated government agency creating more laws,rules, inspections, and audits. 
 
 
 
I would like to add to the others comments and tell the original poster to get a copy of the budget, reserve study and current financial statements. Take them to a credible property management company and have them review the documents. They can tell if the association is run well or not. Look out for "Free" amenities such as utilities. In the State of Washington the law prohibits the association from turning off water, gas, or cable tv that is being provided for "free" to homeowners that have large outstanding dues. The rest of the homeowners must pay for the delinquent's utility bills. You can find this out by looking at the association's total bad debt vs the utility amenities being offered. Ours mounts up to thousands of dollars each year and that is money that could have gone to the reserve fund. Good luck.

Please keep in mind that the condo fees can change, go up for example if there are numerous repairs to be made or if people are not paying on time. I had to raise the fees some years ago as the acct was low due to repairs. Everyone was upset of 
course.Some people did not feel he need to pay on time. At any rate these things can and do happen. A luxury condo will have higher fees. So just look carefully.

As an active Realtor, I am shocked at the fees some condos charge monthly. I live in a condo with really low fees. We have a clubhouse and pool. Only things included are outside maintainence and upkeep of the public areas. 
 
I suggest that you shop for a community that doesn't include water, cable and other things that are better controlled by individual owners. When/if a owner stops paying their fees that include cable and water, the other owners have to pay it for them. 
 
Most high fees are caused by poor management over many years. If the manager and board don't budget for future upkeep and watch every expense, it gets to the point that fees are so high, it ruins the value of the community. The number 1 factor in purchasing a condo is the condition of the community and making sure their are reserves to cover future needs. The board should spend the community money like it is their own. Most don't.

Government regulations can require a seller to provide a buyer with a myriad of documents, but of great importance to the buyer that cannot be discerned from documents is the quality of the board and the quality of the PM. Problems WILL happen - it's the quality of your HOA's leadership team that makes the difference between a great community versus one to avoid.

If anyone thinks its easy to get good information on condos when looking to buy one, they must have never checked any out. Renee suggests the potentIal buyer take the documents--which must be gathered together from several sources, to a property management company. Property management companies don't do this kind of assessment for nothing. If a prospective buyer is considering several properties it would be a full time job to get the information on all of them then he or she would have to pay for an assessment. If anything is incorrect with the information, the assessment is worthless. Renee also condemns government programs generally as if there were a credible alternative. Buyers are at a distinct disadvantage when buying a condo and need all the help they can get.  
 
Larry Davis says to check out the management company and the board, but how does a prospective buyer do that? The management company doesn't want to look bad nor does the board, especially if both are incompetent or are in collusion with one another. Solid information about how the condo is run is the only way to get a good picture, and the prospective buyer isn't going to get that information from the seller, the seller's agent, the board or the management company, especially if there are problems in the condo.  
 
I would be very reluctant to buy another condo without unbiased information. A lack of unbiased information will drive prospective buyers away, and if they have to do all the footwork themselves and pay hefty fees for advice many will simply refuse to buy a condo. And who loses? The condo owners.

Louise- certainly some of your comments have merit concerning cost, time and availability of information when doing research on investing your money on real estate. Just like my real estate agent comment, blanket statements concerning the FL condos/HOAs shouldn't be applied. Many more than not community associations are well run and not in collusion with their PM and legal team hiding poor management. Very simply, a buyer may be attracted to a certain property but if they can't get any information on the financial viability, especially if that info is refused, then they should walk away anyway. Most HOAs/Condos in my experience gladly reveal their financial documents and allow dialogue with the PM if they have one. Some simple searches on any FL county clerk of courts website can reveal how many liens (and other problems) are within a community. A realtor should do the legwork of obtaining financial statements, governing docs, and arranging a meeting with the PM. All part of investing, it takes time. IMO, if a person is in a hurry and cannot do that kind of research, they should rent instead until they can, or stay put if they are happy where they are.

Good advice, MLD and it will work if all goes well. But just being on this discussion group has made me realize how badly some condos are run. We've seen more than a few where even the owner can't get the information he or she needs and have been given the runaround. 
 
I'm sure most HOAs are run wll enough, but there are apparently a fair number that are not. Condos seem rife with possibilities of incompetence and downright corruption. As for real estate agents, I think most are honest but even they cannot always get the proper information.  
 
There are a thousand ways for an HOA to hide or mischaracterize how their condo is run. I just think potential buyers should be aware of the pitfalls--especially first-time condo buyers. Most first- time buyers dont know what to look for nor are they aware of how an HOA can become corrupt and hide or fudge information.  
 
You might think I've been burned in a condo purchase, but I have not. My 16-unit townhouse condo is quite well run but since moving here I can see how it could go terribly wrong with just one bad apple on the board. I know I didn't have all of the information I should have had before I bought. I was very fortunate that it all worked out, but I am now aware of the pitfalls. And this group has gone a long way toward my condo education.  
 
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I've lived in condos for many years. Whatever you do, make sure you have a meter so that you pay your own water bill for your individual unit water use - not one bill for the entire property. As one who has gone that route, it can be a nightmare when the entire property has one water bill and the folks like me (who live alone) end up paying for the ones that have 8 people living together in one unit.