Why Condo Maintenance Fees Are So High

Fees in my condo complex have risen quite a bit over the past five years. Similar increases are experienced by many other condo complexes across the US. This article discusses the reasons behind these hikes and offers practical advice on how to control costs.

Reasons for the Increase

Let's examine the main factors that have contributed to the rise in condo maintenance fees.

Insurance Costs

The fire insurance for the complex has increased by $500 over the past five years. This increase reflects the widespread stress on the worldwide insurance market due to more fires and severe storms. To pay these claims, insurers have had to raise rates for all policyholders, a trend seen across the industry.

Water Costs

We are located in California, a state just emerging from a drought. In this context, the price of water has doubled over the past five years. With a population of approximately 40 million and a robust agricultural industry, the demand for water is high. Moreover, as more people move to California, seeking employment, the demand for housing continues to rise. This has driven up both home prices and rental costs, indirectly increasing labor costs.

Labor Costs

The minimum wage has more than doubled in California in recent years. While this has benefited many workers, it has also increased the costs for supervisory staff, maintenance workers, and other employees.

Are These Increases a Cause for Concern?

It's important to consider that these increases are not necessarily the fault of the condo complex or government policies. Instead, they reflect broader economic and environmental changes that affect all residents.

Do These Trends Apply Elsewhere?

I would assume that factors like these are similarly present in many condo complexes throughout the US. While the specifics may vary, the underlying causes often remain consistent.

Controlling Maintenance Costs

Although these factors are beyond our direct control, there are steps you can take to manage your expenses more effectively:

Shop Around for Suppliers: Look for better deals from different suppliers to save on maintenance and other services. BUNDLE WORK ORDERS: Coordinate the work of contractors so that they come to the complex one time to complete multiple jobs, reducing overall costs. Review Insurance Needs: Assess what should be insured and consider whether you can increase your deductibles to lower premiums. Replace Grass with Native Plantings: In areas prone to drought, consider replacing grass with native plantings that require less water, reducing both water bills and maintenance costs.

Understanding the Financials

It's also crucial to understand exactly what the maintenance fees are covering. Request the financials from your condo board and review the statement of expenditure. In my condo, the funds cover a wide range of services and amenities:

Heating and hot water/sewer Tax payment Insurance Basic cable High-speed internet Backup fund for unexpected repairs

While the fees might seem high, most condo fees cover a significant portion of these extras, potentially justifying the cost.

Conclusion

Condo maintenance fees can be a cause for concern, but understanding the underlying factors and taking proactive steps to manage costs can help. By reviewing expenses and implementing cost-saving strategies, you can ensure that your fees are justified and that your complex remains well-maintained.