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Are Low Condo Dues a Reason to Buy?

By
Services for Real Estate Pros with Condo & HOA Smart

 

Low Condominium or Homeowners Association Dues - May NOT be a Good thing

It may mean:

  • the Developer is still in control of the Association. The Developer may keep dues artificially low in order to make the units attractive and increase sales
  • The Developer may have left the Association without a Reserve Fund
  • The Board may prefer to be popular with the owners and refuse to increase dues, even if it means deferring maintenance
  • The Board may not have established a Reserve Fund. A Reserve Fund is used to save funds for future major repairs & replacements. This would include roof replacement, paving and more
  • Self-Interest by Board members
  • Due to poor cash flow (low dues, high delinquencies, etc), the Board may have depleted its Reserve Fund and used it for Operating Expenses

The above may require the Association to approve an increase in Dues or pass a Special Assessment in order to pay for future major repairs & replacements.

Jason Boone
Duke Warner Realty - Bend, OR
Principal Broker, CRIS, RENE, SRS, PSA

Good thoughts to take into consideration especially if fluctuations in the dues would adversely affect the purchaser's ability to maintain their cash flow and credit.

Sep 26, 2014 09:34 AM