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eZthewashingtonpost.
saturday,february22,2020owners voted 15 to 1 in favor of
levying a special assessment to
upgrade the entrance door and
its security system at a cost of
$30,000. Each owner will pay
about $1, 900 to cover the cost in
addition to their monthly fees.
Some condo owners lament
that if they owned a house, they
wouldn’t be stuck paying high
condo fees. But they forget about
the ability to spread costs for
home repairs among a group.
“People are covering a lot of
costs and work that would other-
wise fall on each other,” Margo-
lies said. “I know where my
money goes when I pay my c ondo
fee, and I know it’s worth it.”
Windle lives at the Sterling,
owns an investment property at
another building in Adams Mor-
gan and rents out a house she
owns in Georgetown. She knows
firsthand the costs of owning a
single-family house.
“People view their condomini-
um as being what is inside their
walls,” Windle said. “They don’t
think about anything that’s be-
hind the walls. They don’t think
about the exterior of the build-
ing. They don’t think about the
roof. They don’t think about the
boiler. Those are the things that
are prohibitively expensive and
have to be dealt with. And those
people who have not been home-
owners aren’t aware of those
issues.”
Brenda Riddle loved her home
in Baton Rouge with its swim-
ming pool, outdoor kitchen and
yard with flower gardens. But in
2014, she and her husband
Charles sold it and moved into a
condo in New Orleans.
“It was a lot to leave, but it got
to be too much,” s aid Riddle, 66.
Their new home has a 24-hour
concierge, valet parking, a roof-
top pool and a fitness center.
Their monthly fee covers water,
sewer and trash removal. At
$967, Riddle thinks it’s a bargain.
“It’s worth it,” she said. “We
were spending more — between
time and money — taking care of
our house. It’s the convenience.
You walk in and everything’s
done.”
Gallegos hears from owners
who complain the fees are too
high. They tell her it’s her duty as
board president to keep condo
fees low. She politely but firmly
disagrees.
“The board’s fiduciary duty is
to maintain the building to the
benefit of everyone,” she said.
“Our fiduciary duty is not to
make the condo affordable.”
For condo owners who don’t
like how high their monthly fees
are, there is a solution.
“Buyers may not realize they
have a say in these things by
joining the condo board,” Evans
said. “I almost always recom-
mend to my clients that they join
the condo board.”
[email protected]nue where monthly fees range
from around $750 for a one-bed-
room to around $1, 200 for a
three-bedroom.
“There are two things that
drive the condo fee,” she said.
“One is the amount you put into
your reserves.... The other part
is driven by your expenses.”
After determining its expens-
es, a board decides how much to
set aside for future projects. Most
boards use a reserve study, which
estimates the useful life and
replacement costs of major
building components such as a
boiler or an elevator. Even with
this guidance, condo boards of-
ten struggle with how much of
the monthly condo fees to con-
tribute to reserves. Some boards
keep contributions to its reserve
funds low to keep fees low.
“They’ll think, the roof will
need replacing in 20 years,” said
To m Skiba, CAI’s chief executive
officer. “A m I going to be around
in 20 years to bear that burden
and pay that expense? Maybe,
maybe not, so what happens
quite frequently is that people
will underfund reserves and t hen
what happens is you get to the
point where something does
break, something does need re-
placement and you don’t have
the money in the bank.”
McCabe faults the former
board at her building in Miami
for applying “Band-Aid” solu-
tions to serious issues. She said
the association didn’t have a
reserve fund for many years be-
cause it failed each time it was
brought to a vote. In 2014, the
board had a reserve study done
and started putting money to-
ward a reserve fund. They now
have about $ 1 million in reserves.
“The last board wasn’t getting
things done, but the current
group is financially prudent,” s he
said.
Evans said low condo fees
should be a red flag for buyers.
“I don’t like to see really low
condo fees because sometimes
low condo fees mean they’re not
collecting enough for reserves
and for future maintenance,” s he
said.
The Sterling, a 16-unit build-
ing in Adams Morgan, is unusual
in many respects. The associa-
tion doesn’t pay for snow remov-
al. Instead, owners take turns
shoveling the walkways. They
also take care of their own land-
scaping rather than pay for it.
“It’s a cohesive group that is
more personally involved,” said
board member Suzanne Windle.
And perhaps most unusual of
all, the condo fees have remained
the same since 1995.
“The history of the building is
such that for any really large
improvement the unit owners as
a collection prefer to do a special
assessment, which is what most
buildings abhor,” Windle said.
At its annual meeting, theFoxhall’s board gave owners
some predictability to their ex-
penses. Although the owners
paid more each month, they
didn’t have to worry about get-
ting hit with a special assess-
ment. The board has also kept
the fees relatively stable. Until
this year when fees were raised
2.9 percent, monthly fees had
increased only 1.42 percent in the
previous five years.
The Garfield Condominium on
Connecticut Avenue is another
building that saves up for its
projects. Board president Jeff
Norman said the association puts
roughly $370,000 annually into
its reserve fund, which is around
$1 million.
“We’ve never had a special
assessment,” said Norman who
pays $780 monthly for his one-
bedroom, 850 -square-foot unit.
“One of the things we tell people
is, ‘yes, the condo fees are high
but on the other hand we are
paying all the expenses up front.’
New roof, new boiler, new AC
system, new carpeting in the
hallways, new lighting system —
they’re all paid out of reserves.”
Although some owners as-
sume their condo board just
picks a number out of the air
when setting the monthly fees,
board members say it takes a lot
of math and difficult decisions.
“I think the condo fee discus-
sion fits into the larger fiduciary
responsibility of the board,” said
Nicko Margolies, board presi-
dent at the Rockledge, a 41-unit
building in Adams Morgan with
monthly fees ranging from $206
for a studio to $463 for a two-
bedroom. “I would consider that
probably the most important
role of the board. Owners are
trusting us with their homes and
their investments. We’ve got to
make sure we’re good stewards of
their contributions and keeping
our community a great place to
live.”
Gabrielle Gallegos is board
president at 4200 Cathedral Ave-Massachusetts Avenue just south
of American University has some
of the highest condo fees in the
District. Its monthly fees range
from around $1, 400 per month
for a one-bedroom condo to
around $3,500 per month for a
three-bedroom unit, which is the
equivalent of a mortgage pay-
ment for some.
The full-service luxury build-
ing was built in 197 1 and has 110
homes. The monthly fee pays for
a doorman, a 24-hour front desk,
a gatehouse staffed by a security
company, a building engineer
and maintenance staff. Rather
than hire a management compa-
ny to oversee operations, the
Foxhall pays for an on-site execu-
tive manager. The monthly fees
also cover the costs for water, gas,
electric, sewer, cable television,
an indoor heated pool, a part-
time lifeguard, an exercise room
and landscaping for the 71 /2-acre
grounds.
Three years ago, the Foxhall
undertook a $3.7 million renova-
tion to its common areas. In
addition to refurbishing the lob-
by, corridors, swimming pool,
locker rooms and gym, the build-
ing installed high-speed Internet
and upgraded its fire-alarm sys-
tem.
Many condo associations,
when faced with a costly renova-
tion, would either take out a loan
or levy a special assessment on
owners. A special assessment is a
one-time charge that in some
cases can be spread out over
several months and is in addition
to the monthly fee. The Foxhall
didn’t need a loan or a special
assessment to pay for the project.
Over the years, it had set aside a
portion of the monthly fees col-
lected to build up a healthy
capital investment reserve fund.
Most associations typically
contribute some portion of the
monthly fees toward a separate
account called reserves. Reserves
pay for large projects or unex-
pected expenses. The foresight ofBut Jessica Evans, a real estate
agent with the Love Live DC Real
Estate Te am, says there is no
general rule on how much condo
fees should be.
“If I had a general rule, it
would be a wide range,” she said.
“For a one-bedroom [condo in
the District], you pay between
$300 and $500 a month.”
More than 73 million Ameri-
cans live in 350,0 00 shared com-
munities such as condominiums,
co-operatives or homeowners as-
sociations across the country,
according to the Community As-
sociations Institute’s most recent
data from 2018. The population
has increased sharply since 1970
when just 2.1 million p eople lived
in 10,00 0 shared communities.
And many homeowners who live
in these communities are unhap-
py with how much they pay
toward common expenses. A
2018 survey by CAI found a third
of respondents felt their monthly
fees were too high.
Evans says condo fees are
uppermost on buyers’ minds. She
often works with first-time buy-
ers who are s tretching financially
to get into a home.
“I find that type of buyer
definitely is concerned about
their bottom line and what that
total monthly payment number
is going to be,” she said. “Condo
fees can actually affect someone’s
purchasing power, in the sense
that the amount the lender will
give them does depend on what
the condo fee is.”
High fees affect sellers as well.
“When [condo fees] get to be
significantly above average, we
see prices go down,” Evans said.
“We see where it definitely im-
pacts the sales price.”
Condo fees can vary by com-
munity. Some fees include utili-
ties such as gas, electric and
water. In some buildings, owners
share the cost of amenities such
as maintaining a swimming pool
or staffing a front desk, whether
they use them or not. Because
expenses in one building often
differ from another, it is difficult
to compare fees.
Utilities tend to make up a
large portion of a condo fee, but
other expenses can add to its
total. In older buildings, repairs
can cause f ees to grow. The size of
the building also plays a role. In
bigger buildings, costs can be
spread among more owners than
in smaller buildings.
But Evans says it’s wrong to
assume because a building has a
lot of amenities its condo fees
will be high.
“Higher fees don’t mean more
amenities,” Evans said. “It does
add up, the maintenance of those
things, but the majority of
[D.C.’s] buildings have very few
amenities. Most of the buildings
with a lot of amenities are newer
so the fees are lower.”
The Foxhall Condominium on
amanda andrade-rhoades For the Washington Post
Fees at the Rockledge, a 4 1-unit building in Adams Morgan, range
from $ 206 per month for a studio to $4 63 for a two-bedroom unit.