One of the most common questions condo associations come across is, “Should we ever lower our condo fees?” It’s a valid question and one that often comes up. After all, who wouldn’t want to pay less for their monthly fees, especially when the association seems to be running smoothly?
However, as tempting as it may be to lower condo fees, it’s essential to consider the long-term consequences.
Planning for the Future
Even if your condo association’s budget allows for excess income in a given year, it’s important to resist the urge to immediately lower condo fees.
Here’s why: when you have a surplus in a good year, that extra income should be seen as an opportunity to plan for the future.
Instead of reducing condo fees, it’s advisable to allocate that surplus into a dedicated account for unforeseen expenses or future maintenance and repairs. This financial cushion can be a lifesaver when unexpected challenges arise, and it ensures that your association is prepared to handle whatever comes its way.
The Rising Tide of Expenses
It’s a fact of life that the cost of living goes up over time. Water, utilities, insurance, and other essential expenses are not immune to inflation. By keeping condo fees at a stable level, you can better absorb these incremental increases without causing financial strain on unit owners.
Preparing for the Unexpected
Another compelling reason not to lower condo fees is to be ready for unexpected emergencies. In condo living, you never know when a major issue might occur.
It could be a particularly harsh winter with heavy snowfall that necessitates extra maintenance or an unexpected infrastructure problem that requires immediate attention. In such cases, it’s far easier to have financial reserves in place than to scramble for funds through assessments or sudden fee increases.
Consistency Builds Trust
When owners become accustomed to paying a certain amount in condo fees, sudden changes can lead to frustration and confusion. Consistency builds trust within the association, and it’s generally better to keep fees stable unless absolutely necessary.
Imagine if, every year, you had to renegotiate your condo fees. It would create uncertainty and could lead to mistrust among unit owners. Therefore, it’s often wiser to maintain fee levels, adjusting them only when essential.
Long-Term Perspective for Condo Fees
So, should you ever lower your condo fees? While it may be tempting to do so when there is an apparent surplus, it’s important to take a long-term view. Planning for the future, accounting for rising expenses, and preparing for unexpected events are all sound reasons to leave condo fees alone, even in good years.
It’s often the best choice to maintain the status quo when it comes to condo fees. If you or anyone you know has additional questions about managing a condo association, it’s wise to seek professional guidance to ensure the financial stability and well-being of your community.
