Condo fees, or HOA fees, are calculated based on various factors and are determined by the condo association’s board of directors. Below we’ll discuss a few factors that influence how Chicago condo fees are calculated and what impacts the amount each unit owner is required to pay.
How are Chicago Condo Fees Determined?
Your condo association’s board of directors sets annual HOA fees based on the annual budget. The biggest factors the board uses to establish the following year’s budget are the HOA’s projected operating expenses and the amount it needs to maintain in its reserves. These two areas make up the largest portion of the annual budget.
- Operating expenses: Condo fees are used to cover the day-to-day operating expenses of the association. This includes costs such as maintenance of common areas, landscaping, cleaning, security, utilities for common areas, and property management fees.
- Reserve fund contributions: A portion of the condo fees must also be allocated to a reserve fund. The reserve fund is used for major repairs, replacements, and unforeseen expenses such as roof repairs, elevator maintenance, or repaving the parking lot. The amount contributed to the reserve fund is based on a reserve study, which estimates the lifespan of common elements and their expected replacement or repair costs over time.
Additionally, things like the amenities the condo offers, the building’s location, its age, and other factors will all influence HOA fees. On average, Chicago owners should expect to pay $300-$400 per month in condo fees.
Fees and assessments help cover the cost of shared property and amenities, so the more amenities an HOA has to offer and the better its location, the higher the fees will be.
How are Condo Owner Fees Calculated?
To determine unit-owner contribution amounts, the board calculates the total annual projected expenses and the amount it needs to maintain in reserves. Then, it divides that total by the number of units in the association to determine the monthly fee for each unit owner.
Worth noting, there is a limit to how much condo association assessments can increase in Illinois and that number is 15%.
Moreover, in addition to regular condo fees, there might be special assessments levied by the association to cover unexpected or extraordinary expenses. These assessments are similarly divided among unit owners and can increase the monthly fee temporarily.
If you have questions or concerns about your association’s fees, contact the board and review your HOA’s financial documents, budget and reserve study. And to learn more about condo association management in the greater Chicago area, please contact us at First Community Management.