Sunday, July 20, 2008

Condo Fees For New Construction. Up?

I recently answered a question about the risks involved with condo fees going up exponentially with new constructions.

Reply
Snoopy, you are dead right about condo fees with new buildings.

They DOOOO skyrocket in the first year.

Sure it is decided by the condo board, and they hate to do it, but they have to. The builder puts in artificially low fees so that you get attracted to the condo. Then once the board is set, they are like "WTF" we have to cut everything AND skyrocket our fees.

I live in Clarendon 1O21 in Arlington and after the board took over we cut everything down the the free water and coffee maker. And our rates went up 10% the first year. I think another 5% the second year.

One big part of that was the reserve. The builder left NO reserve for the future. So we had to create a 5 year plan to build a $400,000 reserve (or something like that), which meant increasing fees to build this.

So YES, you have to watch out for that. But that is only 1 of about 10 tricks that new builders will do, so be VERY cautious, and whatever you do, don't go in without an agent, many do.

Frank Borges LL0SA
Broker FranklyRealty.com

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