Condo fees are the charges called by the condominium association from the co-owners in order to pay the common expenses of the co-ownership. These mainly concern the maintenance of the land and the common parts of the building and for at least 5% the contingency fund.
Condo fees are not spread only over the living area
Even if they enter into the calculation of the keys for distributing the charges, the number of dwellings or the living area are not the criteria which serve as a basis for distributing the condo fees. Indeed, in accordance with the law, the common expenses are distributed according to the relative value of the fraction of a co-owner, which is the only possible distribution method. The relative value of a determined fraction is expressed in the declaration of co-ownership in the form of a percentage or a fraction and corresponds to the value of a lot in relation to the entire building. It is calculated on the basis of its dimensions, but also of its nature, destination and location.
The contingency fund
This is a reserve of money that meets a legal requirement. In Singapore, it represents at least 5% of condo fees and is intended to cover any major work on the building. The contingency fund is formed by the syndicate of co-ownership, which also owns it, which means that a co-owner who sells his condo cannot claim to recover the sums he paid into it and which would not have been spent. . In reality, the 5% rate is insufficient, as the co-owners have to pay a substantial supplement when it is time to carry out repairs.
Low condo fees hide nasty surprises
When condos boast surprisingly low condo fees, beware. This is the case with too many condos, especially those presented by developers who minimize condo fees in order to sell lots more easily. However, the reduced costs very often hide a deficiency in the contingency fund, a lack of preventive maintenance and the failure to carry out necessary work. In other words, only the bills for fluids, cleaning and insurance are paid. Such negligence increases the number of claims, and in particular water damage by infiltration through the roof or exterior walls, which results in higher insurance premiums.
Condo fee overruns
When the estimated budget for Amber Sea new launch condo 2021 fees is not sufficient to meet expenses, the syndicate calls for special contributions from the co-owners. These are sums of money needed to complete the budget and meet all expenses. Such situations can be explained either by the fact that the budget was minimized, which is often the case with new buildings, or that the building is poorly managed, or that an unforeseen expense had to be paid.
Condo fees compared to house charges
Condo fees often seem high to homeowners because they tend not to weigh comparable expenses. Indeed, the building charges include part of the fluids consumed by the inhabitants, but also include services that do not always benefit the owners of houses, such as cleaning of the common areas, or the costs related to the elevator or the fitness room.
The condo fees that each owner pays correspond to the building’s share of the charges. They include the maintenance costs of the building and the land, as well as the Contingency Fund, which is a reserve of money intended to cover any major work on the building.