From high rises like Midtown at Reston Town Center to garden-style communities like ParcReston to townhomes like Ivy Oak, many of Reston's amazing neighborhoods are condo associations. And that means condo fees... often in addition the Reston Association fees.
One of the most common questions I get when showing condos is what the fees are actually for. This is a great question because when you know how the fees are used, and then you can decide if you believe the monthly condo fee fits into your budget and needs.
Condo fees fund two categories: operating expense and reserve funds. The operating expenses are the monthly costs required for trash, grounds maintenance, and snow removal, administration and condo management. The reserve funds represent the anticipated cost of replacing and repairing common elements of the property like roofs, sidewalks, and elevators. All of these costs are estimated and used as the basis for the monthly condo fee.
For the reserve fund, the condo association must do a study every five years to estimate how much money is needed to repair, replacement and restoring the capital components of the property. Every year condominiums (in Virginia) are required to review their study results and confirm that they are reserving enough money for these items. Sometimes, they find they aren't because something unexpected happened.
So, what does that mean for you, they buyer? You need to study the condo resale package, which includes the condominium bylaws, rules and regulations, current financial reports, and audited financial reports. Review these carefully with an eye toward spotting potential problems. Questions to ask should include:
- What do the audited financial statements say about the reserve funds? Are they adequate?
- What major projects/repairs are anticipated for the upcoming year?
- What projects were completed in the prior year?
Another thing to consider is what type of condo environment are you looking at? Is there a Doorman, a Concierge? If there is, you will pay higher condo fees for that amenity.
Many of my clients choose condo living simply because they are not responsible for the exterior maintenance -- at not responsible beyond paying their condo fee. If you are one of the thousands of busy professionals that live in Reston, the time you save managing or doing those tasks is well worth the fee itself.