There are few things upon which most people agree, but a general dislike for paying more today for something that cost less yesterday is pretty universal. This goes for taxes, consumer goods, healthcare, and of course for monthly maintenance or carrying charges to a co-op, condo or HOA. But like it or not, the reality is that major building systems wear down, natural disasters happen, and the environment around a property changes over time. All of these will eventually mean an increase in what each individual shareholder or owner must pay in order to keep his or her community solvent and well-maintained.
That said, it’s important for boards, management and residents alike to understand why and at what intervals fees should be increased. An open and honest board committed to transparency in its processes will have a much easier job conveying the necessity of a cost hike than one acting arbitrarily or in a clandestine manner. Similarly, residents who know the whys and wherefores of an increase are far less likely to grumble or resent their board for implementing it.
While every association is unique, there are certain commonalities related to why a maintenance fee increase could be necessary.
“Maintenance charges are going to be driven by a few different things,” says Sean Jordan, Director of Property Management at FirstService Residential in Canton, Massachusetts. “It could simply be that expenses are increasing, or that a short- or long-term plan is finally coming to fruition. For example, say that a piece of building equipment or machinery has become harder to maintain, and needs an increasing amount of service—or you’re increasingly repairing something because the association has been using it more. There could also be a change to a local ordinance that requires some work at the property to make sure it’s in compliance.”
Insurance can also be a factor. “Both general and liability rates could go up, as could utilities” says Jeanne Eberhardt, a property manager for Casagmo, a community in Ridgefield, Connecticut. “And cost of living increases can impact landscaping, snow removal, and trash removal.”