Condo assessments can amount to a serious drain on your wallet, but they’re in place for a good reason. HOA fees are used to cover the costs of maintaining and improving common areas of the community and its amenities, which also leads to improved property values for the condo building. This all benefits your bottom line, but the fees can be hard to swallow when they feel so high. In this post, we’ll break down some of the factors that contribute to Condo Association fees in Chicago.
Factors That Impact Condo Assessment Fees
Whether you’re a unit owner trying to understand how your assessments are being put to work or are looking to purchase a new condo property, it’s important to have a thorough understanding of how much assessment fees are being allocated and spent.
Here in Chicago, there are several variables that can contribute to higher HOA fees in certain cases. Examples include the following:
- Association amenities – Condo associations with extensive amenities, such as swimming pools, fitness centers, concierge services or on-site security tend to have higher operating costs. The maintenance, staffing and insurance expenses associated with these amenities can in turn drive up the HOA fees.
- The age, condition and size of the building – Older buildings may require more frequent and costly maintenance and repairs. Similarly, if a building has not been adequately maintained over time, there may be a need for significant renovations. All of this can lead to higher fees to cover these expenses. Moreover, larger buildings may also have more expensive operating costs, which may contribute to higher HOA fees.
- Location and property value – The location of the condo building can also impact HOA fees. Properties in desirable neighborhoods or areas with high property values tend to have higher fees to cover higher land or property taxes, insurance premiums and other associated costs.
The board should evaluate HOA assessments as part of its annual budgeting process. It’s important for condo associations to have sufficient funds in reserve to cover future repairs, maintenance and capital improvements as well as have enough funds on hand to address the ongoing operating budget.
If you have concerns about your association’s fees, contact your board members and review your HOA’s financial documents, budget and reserve study. Your condo board is required to act as a fiduciary and make decisions based on the best interests of the entire community. If you have questions or concerns, they should be willing to listen.
To learn more about condo association management in the greater Chicago area, please contact us at First Community Management.