Don’t save now only to pay later with a condo unit. Sometimes low dues seem like a great deal, but they can mean future problems and expense for you if they mean lowered services and a smaller reserve. While you should definitely rethink a unit where you are assessed dues far in excess of what is needed for maintenance and future repairs, you should not choose a unit based on how low the dues are. Rather, find out what you are getting for your money and whether you’re happy with this level of payment.



Assessments, or dues, are collected to cover each resident’s share of the costs of future repairs/replacement, regular maintenance of common areas, maintenance and repair of common facilities, such as swimming pools and fitness rooms. They also cover such expenses as an on-site manager and communication strategies, such as newsletters and a website.





The condo board should have a statement available that tells you how much money is in the reserve for specific items. This enables you to find out how much money has been spent on various things. It’s also a good indicator of what the board spends money on - do they only do work when absolutely necessary, do they occasionally vote in to improve things or do they spend lavish amounts of money on peripherals while neglecting the need to save for important structural replacements?



There are legitimate reasons why a reserve might be lower than normal. A reserve that has just been tapped to do necessary work may be understandably low and new condominiums are just starting out with their reserves. Be suspicious of low reserves for a building that has been standing for a while and has no history of major work done. It probably means that the assessments are too low or being misallocated.



Low assessments are a happy thing for many condo owners, but they can come at a price. Low dues can mean that the condo board is not investing in their reserve or maintenance enough, which can come to bite you if a major structure or system need to be repaired or replaced. Lower dues can also mean lack of services that make the condo worth investing in in the first place, such as an on-site manager who resolves problems and regular maintenance of common areas.



It’s a good idea to sit in on one or two board meetings and see how the board handles money. If the condo board is talking of cancelling amenities or services to lower dues, beware. The amenities and services of a condo is what gives it part of its resale value. If you buy into a condo where the board wants to cancel services like maintenance, you may be in for a building that gets progressively dilapidated over time, which won’t help your equity much.



Dues should be high enough to cover the condo’s monthly expenses and contribute enough to the repair/replacement reserves to cover any maintenance costs. A low monthly assessment may be attractive, but don’t choose it over one that’s a little more but meets the needs of the building and its owners.