Condo fees, reserve fund and unpaid fees on the unit

What are maintenance fees for?

Every owner contributes to the condominium's shared costs. Depending on the property, the fees cover:

• cleaning, gardening and pool maintenance;
• security and access control;
• electricity and water for the common areas, the backup generator, pumps;
• management, accounting and, where there is cover, insurance;
• minor repairs.

Costs are split between units according to the shares set in the bylaws. The amount is generally set by the budget approved at the owners' meeting (see bylaws, administrator and owners' meeting).

The reserve fund

The reserve fund is a collective saving for major or unexpected works: roof waterproofing, facade painting, replacing equipment, repairing parts exposed to the coastal climate. Whether there is one, and how it is funded, depends on the bylaws and the decisions of the owners' meeting.

A condominium without a reserve is not necessarily badly run. But it will have to pay for major works through special assessments, which can be large and come at short notice.

Regular fees and special assessments

Unpaid fees on the unit: a sensitive point

Depending on the bylaws and the law, unpaid fees may be claimed against the unit itself and can therefore become a problem for the new buyer. The exact position depends on each case, and your lawyer can clarify it.

The practical precaution is clear: ask for a certificate showing the fees are paid up to date, recently issued and signed by the condominium's management. It is also advisable for the sale contract to state who pays special assessments that were approved before the sale but fall due afterwards.

Why it matters

• Your budget. Fees are a fixed cost that affects the return on a rental.
• The state of the building. Very low fees can hide deferred maintenance.
• The health of the condominium. If many owners do not pay, maintenance suffers and the burden falls on the others.

What to check

• The current fee and how it has changed recently.
• The approved budget and the condominium's latest account statement.
• Whether there is a reserve fund and how it compares with foreseeable works.
• Special assessments approved or under discussion.
• The overall level of arrears in the condominium.
• The paid-up certificate for the unit you are buying.
• Which services are included in the fee and which are not: water, electricity, internet, gas.

Questions to ask the seller or the administrator

• What is the current fee, and when was it last changed?
• Is there a reserve fund? How is it funded?
• Are major works planned or approved? Who will pay for them?
• Can the management issue a paid-up certificate before signing?
• Do any owners have significant arrears, or are collection proceedings under way?

Common pitfalls

• Relying on a figure given verbally, without a budget or account statement.
• Signing without a paid-up certificate, or with an old one.
• Overlooking approved works that have not yet been billed.
• Mixing up shared and individual costs. Some services are billed to each unit separately from the fee.
• Judging a condominium by its fee alone. What matters is what the fee actually keeps maintained. A technical inspection of the common areas helps anticipate future works.

Only a review of the condominium's actual documents can lead to a conclusion about its finances.

How we can help

Our condominium audit reviews the budget, the accounts, the reserve fund, the minutes and the unit's paid-up certificate. See also what to check before buying an apartment and the condominium regime.

Request a check.