Residents of community associations expect to pay a monthly assessment and perhaps an occasional special assessment–but are surprised by the number of additional fees they may be charged.
Depending on where you live in the Chicago area, associations and their management may tack on fees for moving into and out of the building, garage space, reserved parking space, clubhouse or party room rental, keys and key replacement, pool passes, mailbox name tags and copies of rules and governing documents.
If you don’t pay your assessment on time, you’ll probably be hit with a late fee. This fee might be a flat dollar amount or up to 25 percent of the assessment. It also might escalate according to the number of days you are late. After a couple of months your account might be turned over to an attorney, for whose services you will pay.
In some cases, you’ll make refundable security deposits for moving in, moving out, renting the clubhouse or party room or doing extensive remodeling to your unit. The deposits could be in addition to or instead of a non-refundable fee.
“The trend we’re seeing now is a move-in fee and a move-out deposit,” says Maureen O’Brien of Baird & Warner in Lincoln Park and president of her homeowners association.
Move-in fees average about $100 but can go as high as $500. Some buildings don’t charge at all. Others nickel-and-dime new residents with nominal charges for mailbox tags and copies of the rules.
Another trend is for associations to charge refundable construction deposits, O’Brien says. As condominium buildings age, many owners are rehabbing their units.
“When contractors come in, there is a chance they may do some damage to a common element,” she explains.
One hot button is the fee management companies charge for a closing letter, the document that says your assessments are paid to date and which the buyer’s lender or attorney (in event of a cash sale) requires before you can sell your unit. Expect to pay from $40 to $100 upfront.
“It’s a problem,” says Mike Baum of Baum Property Services Ltd. in Aurora. “Nobody wants to pay it. People are refinancing because interest rates are the lowest in history. We get several requests a day, and we’re small. Many companies have full-time employees who do nothing but this.”
The typical closing “letter” is a two-page questionnaire, he says. Compounding the task is the fact that many sellers put off telling the manager they need one until a couple of days before their closing.
“Then it’s a mad dash,” says Baum. “The fact that a property manager is signing his or her name to it implies some liability should the information not be correct. It can’t be rushed. I like to have a week to process closing letters because of the volume.”
Some management companies charge excessively for closing letters, says Jerry Hoffman of RE/MAX Territory in Elk Grove Village and secretary of his homeowners association in Hoffman Estates.
The Illinois Condominium Property Act “gives them up to 30 days to get the letter out,” he says. “Some will say they need a 30-day notice. If they have less time than that, they’ll charge $10 per day for each day under 30 days.”
Some fees are necessary and others aren’t, say the experts.
Jerry Heilbrunn, vice president of condominium management for Draper and Kramer in Chicago, says he believes fees are warranted when the association incurs out-of-pocket costs.
“It’s good, sound logic that if something benefits one person, those building costs should be directly passed to that person,” he says.
In the case of move-ins, he prefers to see a single fee that covers everything–including keys and mailbox tags–that a new resident needs to get settled and use the facilities.
“It depends upon the building,” says O’Brien. “If a building is small enough where people know everyone and are more considerate of their neighbors, fees aren’t as necessary. When you get into a large building, you usually have a higher percentage of tenants and more people moving in and out. If they have to spend money, they’ll be more conscious of what they are doing and how they are doing it.”
Baum says he can’t see associations charging for copies of rules and governing documents.
“What we’re doing more and more is having a stack on a table at the annual meeting,” he says. “We call a printer and have them done so people can pick up a copy. It’s simpler that way.”
Extremely high fees may be justified in the case of potential security breaches, such as replacement pool passes or access cards.
“Nothing is more important to a building than security, and sometimes the only way to make people sensitive to that is to hit them in the pocketbook,” says Heilbrunn.
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Do you have an issue you’d like to see discussed in a future column? You can write to Pamela Dittmer McKuen at Community Living, Chicago Tribune, Your Place section, 435 N. Michigan Ave., 4th Floor, Chicago, Ill. 60611. Please include your phone number. Or e-mail Pmckuen@aol.com. Answers to queries will be provided only through the column.
