How Maintenance Fees Are Determined and How They Vary
Condo maintenance fees are set by the Board of Directors who is elected by a majority of the condo owners. The fees are based on the projected financial needs of the association for the upcoming year.
By law a reserve fund to cover future capital improvements is included in the fees. Future capital improvements cover such things as replacing the roof, exterior painting, parking lot resurfacing, etc.
A typical budget for a condo association will include insurance on the structures, salary for a resident manager as well as groundskeepers and maintenance personnel, trash collection, water, common element electricity, the reserve fund and other line items.
Some times maintenance fees include electricity for each individual unit. This may account for higher maintenance fees that you may sometimes encounter. Other reasons for high condo maintenance fees may include: rebuilding of reserves via special assessments, special assessments for emergency repairs or an older complex which has a fair amount of regular maintenance. Finally, some condominiums such as Koa Resort in Kihei are very low density. Koa Resort has 54 units on over 5 acres of well manicured grounds. The byproduct of these beautiful grounds is a higher maintenance fee. Generally, oceanfront properties have higher maintenance fees than non-oceanfront condominiums.
When your offer for a condominium is accepted, you will have the opportunity to review the condominium documents. During that time, you will have access to Articles of Incorporation, Board Meeting Minutes, Current and Proposed Budgets, Financial Statements, Disclosure of Any Lawsuits and more. You will have the opportunity to review these documents and gain a better understanding of how the condominium you are purchasing is being managed.