It has been my experience that many times real estate agents and potential purchasers do not understand what they are getting for their money when asking about the dues. They compare the monthly amount paid at Building A to Building B and rarely investigate the details that create the difference. Each building has differing internal operations and financial requirements. Some may include all or partial utilities while another may not include any utilities.
Let’s establish two condo buildings with two very different monthly dues on a condo with the same square footage. Looking at the footprint of each building and structure from the street, one could easily make the assumption the buildings are almost identical, though when thoroughly analyzed, there are a number of aspects not obvious to the potential buyer.
Miracle Mile Condo Association has 245 units and is 24 stories tall, built in 2000. Tuscan Sun Condo Association has 250 units and is 25 stories tall, built in 2002. Both Miracle Mile and Tuscan Sun both have a two-bedroom unit that is approximately 2100 square feet. The monthly condo dues at miracle Mile, for this comparable space, are $769 per month while the Tuscan Sun dues are $565.00 per month. On the surface, it would appear that the Miracle Mile condo dues are outrageous when compared to Tuscan Sun.
Miracle Mile condo dues are affected by a number of things:
- After developer turn over, former boards did not establish the proper reserve fund contribution
- Internet service (50mpbs) is included in the monthly dues
- 525 parking spaces
- Slightly larger pool area than Tuscan Sun
- One additional grill than Tuscan Sun
- Overall common area square footage is larger then Tuscan Sun
- Two full time maintenance employees
- Two concierge team members 7-3 and 3-11 and one 11-7 shifts 24/7/365
- Full time community manager and assistant manager serve the community
Tuscan Sun owner’s dues are affected by a different set of circumstances, as follows:
- Adequately funded reserve contributions
- No bulk Internet service provided
- 500 parking spaces
- Overall common area is smaller than Miracle Mile
- Smaller outdoor pool area than Miracle Mile
- One maintenance employee
- One concierge team member per shift 24/7/365
- A full time community manager and part-time assistant manager serve the community
The substantially increased fees for Miracle Mile are based on their fiduciary responsibility, physical attributes of the property, and the community’s demands for services and lifestyle choices.
- Increased condo fees in order to play catch-up on the annual contribution to the reserve funds in order to adequately prepare for long-term upkeep of the facility
- Community provided Internet service results in increased dues
- Maintain a larger common area, which usually translates to more expense
- Maintain a larger staff in maintenance, concierge and management substantially increases the annual dues.
The appreciably lower dues for Tuscan Sun reflects a community that has adequately funded reserves, the physical attributes of the property, and the communities relatively lower demand for services and lifestyle choices.
- Reserves funded to meet long term needs
- Bulk Internet service not provided
- Maintain smaller common area results in lower dues
- Fewer employees on staff decreases dues
After analyzing the two communities, the many nuances affecting the two different associations are varied and affect the fees accordingly, which is always the case.
When comparing condominium dues from one building to the next, do some research. Yes, the condo unit may be the same size between buildings and you may think that the monthly dues should be equal or within a couple cents. However, some due diligence will usually give you better insight to a community’s expenses and lifestyle desires.