Homebuyers In Salt Lake City Should Check Condo HOA Dues.
I was wondering about all of the Homebuyers in Salt Lake City that are considering making that new home a Condominium, and if they really knew the importance of understanding the HOA dues?
Last night the Home Owners Association here at Vista Montana in West Jordan, voted an increase to the annual Home Owners dues. It was a modest one, and when averaged out over the next 12 months, will increase the cost of services by about $10.00 a month.
Homeowners dues are moneys collected from homeowners in Condominium complexes, PUDs etc that pay for the ongoing upkeep of the Community.
Almost everyone understands that condo dues need to be collected monthly to take care of the monthly expense incurred by the collective community. IE: Lawn upkeep, snow removal, common power bills, swimming pools etc.
I was reminded again this year at the lack of understanding among the current home owners, and home buyers looking to buy a Condominium about Home-Owners fees in general, and in that part of the assessment that is considered the "reserve account" in particular.
The reserve fund is maintained to make sure that when the time comes to replace or repair big ticket Items like roofs and roads a special assessment of homeowners is not necessary.
The amount of the reserve fund is determined by what the association will be responsible for down the road, how long those items will last, what it will cost to repair or replace those items when the time comes.
Then amortize that cost monthly, prorate the amount according to the percentage per unit called for in the Condo documents and you have the reserve part of the HOA budget figured out.
An example of this could be a Condominium Community that has a club house as an amenity. Each home owner owns an undivided interest in the club house and the furniture therein. The current furnishings cost $15,000 and are expected to last 15 years.
The Home Owners Association should collect from each unit each year for the next 15 years $1,000 plus an anticipated inflation number to avoid needing to collect a large chunk down the road.
Lets say that inflation number anticipates a total cost for furniture for the club house in 15 years of $18,000. thats $1200 per year. One hundred dollars per month.
If the Community has 100 units in the association, then each owner contributes one dollar per month for the replacement of Club House Furniture.
You can see that the more amenities a community has, the greater need for a large reserve account.
If your thinking of buying a Condominium in Salt Lake, be sure sure that your Realtor understands HOA dues; how to evaluate them and what they can mean to you in fees down the road.
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We know how to help Homebuyers in Salt Lake City check the Condo HOA dues.