Maintenance Fees: Not So Hidden Costs
By Lisa Scontras
For a growing segment of the real estate market, downsizing from a single-family home to a condo is a great way to have it all. Amenities are the deal makers and include everything from pools and tennis courts to the fancier sand-bottomed pool at the Beach Villas in Ko Olina, the biometric fingerprint elevators that open to your own floor at The Pinnacle downtown, boat docks in Hawaii Kai and even accommodations for pets like the private dog park at the Allure Waikiki.
Depending on your lifestyle, you could go splashy or you could go basic, all for a cost – not just in the purchase price, but also in the maintenance fee.
Maintenance fees pay for the upkeep of the building, including common areas and amenities as well as landscaping, and scheduled maintenance items, such as a new roof or new exterior paint, and even some utilities.
Nicole Choi, Realtor and partner at Prudential Locations, says for the most part, the maintenance fees are simply a way to pool money from all the owners in the building to pay for the same type of expenses you would in a single-family home. In fact she says, the larger the building, the smaller the fee, as costs are spread out over more units/owners.
“Maintenance fees cover common area maintenance, water, sewer, amenities and insurance for the building,” Choi says. “Single-family home owners also have to pay for the maintenance of the house, water, sewer, pool, yard services and periodic painting, termite treatment, roof repair or replacement and home-owner’s insurance.”
Many of the new condo buildings have fitness centers, which can take the place of club memberships. Others have clubhouses and full spas, which are all considered part of the common area.
In addition to upkeep of the common areas and amenities, along with building maintenance, some condos include utilities in their maintenance fee. Choi recommends condo shoppers find out what is included with the monthly cost.
Most maintenance fees cover water and sewer, about a third cover hot water and cable TV, and some even cover electricity, central air conditioning, Internet and marina usage.
Homebuyers in general do pay attention to maintenance fees to the extent that whether it is high or low they can affect the desirability of a condo building.
“A building with a lower maintenance fee sells fast,” says Choi.
Among Oahu condos with the lowest dues, according to Choi, are: Country Club Village, Moanalua Village, Harbor View Plaza, Waipuna, Ala Wai Plaza, Kahala Towers, Tropic Gardens, Waialae Gardens, Moana Kai, Lalea at Hawaii Kai, Kalama Kuu, Haiku Hale, Ahuimanu Gardens, Fairway Village Townhouse, Kai Nani at Makakilo, and Ridgeway, just to name a few.
When the homeowners association governing the community does not have enough reserve funds collected when an unexpected repair or expense comes up, they may opt to cover the expense with a special assessment – to split the cost among the owners with either a one-time charge or by spreading out payments over several months.
Based on a new set of data gathered by Prudential Locations Research Division, roughly 6.3 percent of Oahu condos imposed a special assessment on its owners in the past 12 months.
“A buyer should review the association’s financial statements to determine if there are any pending assessments or possibility of maintenance fee increases,” she says.
Choi also suggests buyers be aware that homeowners associations evaluate their budgets every year and the potential for rate increases is common. She reminds buyers that older buildings require more maintenance and the costs to cover updating plumbing, repairing equipment, and insurance can run higher than for newer buildings.
In the end, maintenance fees boil down to being a function of upkeep requirements and sound management, and might afford some very attractive amenities not available in a single-family home. Live it up. Make a list and start comparing.
See More Listings