Repairs and capEx for condominiums

[Dominic Jacquot]

Hello,

I'm new to this community, and I have a question regarding the analysis of a condominium property. I'm unsure whether repairs and capital expenditures (CapEx) should be included in the list of expenses or if the condo fees will suffice to cover these two categories. Should I allocate a portion of my monthly budget for repairs and CapEx, or can I rely on the condo fees to handle any potential costs associated with these items?

Thank you for your assistance!

[Richard F.]

Aloha,

You are responsible for certain elements, your Association is responsible for others. Only your Declaration can identify exactly what you are responsible for, and therefor what elements you need to plan for their capex. The condo fees theoretically would cover the Association elements for repair and capex, however there is no guarantee of that. You need to get an understanding of the Association Annual Budget and, in particular, the Reserve Funding Plan. This plan should clearly identify all of the capex, and should also reveal what the actual level of current funding is for those items. It is not uncommon to find monthly fees have been intentionally kept at a low level, while Reserves are not properly funded to enable the major repair or replacement when due, without an "unexpected" Special Assessment.

I always recommend you check for a local chapter of the Community Association Institute. They will have resources that will clearly explain the Budget and reserve funding process, and all other aspects of Association operations and how they are supposed to be run.