Whether you’ve ever considered buying a condo or not, you’ve probably already heard about the condo fees that all co-owners have to pay. Also known as condominium fees for Canninghill Piers, these fees are charged to owners on a monthly basis.
Because they can easily appear scary, many people refrain from acquiring a condo. But, well dosed, these costs can become the ally of the co-owners by allowing them to cover both the expenses necessary for the regular maintenance of the building and some major works.
In order to demystify these condo fees, developers have gathered for you the important information you need to know about them.
3 things to know about condo fees
- Are condo fees optional?
In Singapore, condo fees are mandatory. The law stipulates that all co-owners must participate in the common expenses related to the maintenance of the building. In the event that an owner is in default of payment, the syndicate of the immovable may impose penalties ranging from a simple notice to a legal action, depending on the seriousness of the case.
- How are condo fees calculated?
Ideally, the amount of condo fees is calculated based on the relative value of the portion of the building owned by the co-owner. The value of each of the condo units is specified in the declaration of co-ownership. It is represented as a percentage or fraction.
The relative value of the unit is calculated according to its dimensions, area, location in the building, etc. If the value of the condo held is equivalent to 10% of the value of the building, the fee should be the equivalent of 10% of the common expenses. Thus, a large condo unit located on the top floor with a great view will have higher condo fees than a smaller apartment located on the ground floor.
It is therefore quite normal that the condo fees of the co-owners of the same building do not amount to the same amount.
But other factors must be considered in determining the amount of condo fees that the owner will have to bear. For example, the services available in the condominium will also affect the fees to be paid. The more services the condominium has, the higher the fees will have to be.
Note that it often happens that condo fees are miscalculated by developers. It is therefore necessary to be careful and examine the distribution of condo costs before concluding the real estate transaction.
- Can we avoid additional contributions?
The additional dues, also known as “extraordinary dues,” are a large amount that co-owners have to pay all at once. They can occur when a major problem requires immediate repair and to which the contingency fund cannot provide.
This type of contribution can obviously put off some potential buyers, but be aware that it is possible to reduce them as much as possible with good measures in place. The risk of having to contribute to this type of dues can be reduced, among other things, through good management on the part of the syndicate, a sufficient contingency fund and appropriate condo fees.
Condo fees and contingency fund are two essential elements to consider when buying a condominium. Rather than being tempted by low fees, make sure that these are an adequate amount to avoid unexpected future contributions. Feel free to ask the seller questions to help you make an informed decision.