Reston Real Estate: Are Condo Fees a Total Rip-Off?

While helping a couple narrow down the focus of their Reston home search recently, the husband made a statement that he would never own a condominium because the fees were in his opinion “a total rip-off.” As a condo dweller active on my condo’s Board of Directors for years, I’ve heard this sentiment on condo fees many times before.

When you own a townhouse or a single-family home, you understand that sooner or later you will have replace your water heater, roof, windows, siding or appliances. Hopefully, you have a financial plan that allows you to save for the replacement of things as they wear out. It is a “pay me now or pay me later” situation, but you are going to pay. When you defer home maintenance, you won’t get top dollar for your property when you go to sell. Most people would prefer to save a little bit each month in anticipation of home repairs rather than face a large unplanned expense. Condo management requires this forced savings.

Every year condominiums in Virginia are required to confirm that they are reserving enough money to repair, replace and maintain the property. If a condo has not adequately reserved (saved) the money needed to make repairs and has a sudden failure in a common element, it must make a special assessment in order to make whatever repairs are needed to maintain the property.

So, a rip-off? Not if your property is properly maintained.

What are my condo fees paying for anyway?

In a condominium, the fees fund two categories: operating expense and reserve funds. The operating expenses are the monthly costs required for trash, grounds maintenance and snow removal, administration and condo management.

The reserve funds represent the anticipated cost of replacing and repairing common elements of the property like roofs, sidewalks, and elevators. The amount of money needed in the reserve fund is determined by a study which by law, is undertaken at least every 5 years for the purpose of determining how much money is needed to repair, replace and restore the capital components of the property. Every year condominiums in Virginia are required to review their study results and confirm that they are reserving enough money to repair, replace and maintain the property.

Before you choose this form of own ownership consider:

  • Condo life involves a lot of governance
  • Well-run condos always include an active membership

Some leadership decisions might be unpopular, but they ultimately protect the membership from unplanned assessments by insuring that reserves are adequate to meet the expected and unexpected repairs.

When looking at condominium ownership, you will have a chance to review a Resale Package that will include the condominium bylaws, rules and regulations, current financial reports, and audited financial reports. Review these carefully looking for potential problems. Questions to ask should include:

  • What do the audited financial statements say about the reserve funds? Are they adequate?
  • What major projects/repairs are anticipated for the upcoming year?
  • What projects were completed in the prior year?

The other thing to consider is what type of condo environment you are looking at. Is there a doorman, a concierge? The cost of people always goes up, so if you are looking at a condo with these types of amenities you should expect a slow steady rise in condo fees.

Are my condo fees too low?

If you live in a condo where the fees haven’t gone up for years, or if you are looking to buy a condo where they are advertising a low condo fee as a “feature,” take a closer look. The costs of goods and services have not gone down. Try to determine if something isn’t happening that should be happening.

When evaluating the financial position of a condominium there are some cost-of-ownership items that don’t apply in single-family home ownership. One glaring item is the cost of delinquencies — due to owners that are behind in paying their condo fees. While this isn’t the issue it was during the post-housing crash, a well-managed condo will actually provide an allowance for some percentage of delinquent accounts to insure that they have adequate operating cushion. When looking at a condominium’s resale package, be sure to look at the dollar amount of delinquent accounts and ask what that number represents as a percentage of the whole.

So what’s the upside of condo ownership?

In a well-run, well-managed condominium where the Board of Directors takes its responsibility seriously, property values are protected through active maintenance and enhancement of the property. You not only get to enjoy a well maintained property while you live there, you can feel confident about the condition of your property when you go to sell.

Save

Save

Recent Stories

Live Fairfax is a bi-weekly column exploring Fairfax County. This recurring column is sponsored and written by Sharmane Medaris of McEnearney Associates. Questions? Reach Sharmane at 813-504-4479. There are so many fun things…

This biweekly column is sponsored by The Mather in Tysons, Virginia, a forward-thinking Life Plan Community for those 62 and better. November — a month containing both Veterans Day and Thanksgiving…

The annual exhibit returns to Reston in early December (courtesy RCC) Reston Community Center will host its 24th annual gifts and shopping exhibit in early December. The Gifts from the…

Curative will operate COVID-19 testing mobile labs at six sites in Fairfax County (courtesy Fairfax County Health Department) Curative is set to shut down all of its public COVID-19 testing…

The Ravel Dance Studio will re-open for fall classes 2020. The school will offer in person and virtual online instruction. With over 5000 sq. ft. to social distance the school has added air ionization filtration systems, ballet barres, acrylic dividers, hands free bathrooms, strict monitoring and more.

The Ravel Dance Studio will produce a Nutcracker Ballet Hollywood style video through the Reston Community CenterStage. REGISTRATION online begins August 17.

Submit your own Community Post here for just $99.

Chris Green is one of the DMV’s finest fitness instructors. A Lululemon and South Block ambassador, he is a coach and mentor to so many. He embodies grace, positivity and motivation in ways that no one else can. If we could all learn a thing or two from him, the world would be a much better place. He does so much for others, and does so with a smile on his face 99% of the time.

He recently ruptured his Achilles and has an incredibly long and tough journey ahead. As if COVID hadn’t impacted fitness professionals enough, throw this in the mix and it’s a double, even triple whammy. CG is no longer able to work and do what he loves for the time being because of this and we’d love your support.

Read More

Submit your own Community Post here for just $99.

×

Subscribe to our mailing list