Condominium association common charges are an important component for those who live in a condo building or community. The board of managers oversees the management of shared facilities and sets and collects the monthly common charges from all of the condo owners. These funds allow the board to provide those shared resources and amenities that owners expect and desire, such as landscaping, security and building and grounds maintenance.
As the economy evolves, so do the costs of these services that condominiums provide for property owners. In some cases, condominium associations have to make the difficult decision to increase the fees that they collect from owners. Some costs have increased dramatically the last few years such as insurance and that cost gets passed on to the unit owners in the form of common charge increase. It helps if the condo association communicates the need and timing of the increases with the owners so those owners can plan their own budget accordingly. What limitations apply to increased association fees? Usually none, unless the condominium’s by-laws impose a restriction (for example, most by-laws restrict the board’s ability to do improvements over a certain dollar amount without unit owner approval).
The law doesn’t impose a limit
Neither federal nor state statutes establish a maximum increase permissible under the law. Instead, the people running the condominium association can adjust the fees assessed based on actual operating expenses.
Ideally, condominium boards should try not to increase monthly fees by more than 3-5% annually but it may not be possible to meet that guideline. In 2024, for example, the average condo fees increased more than the recommended amount. Condos in Manhattan saw an 8.6% increase in fees.
Particularly in scenarios where inflation and rising costs create a burden for the association, passing those expenses on to individual property owners may be the only way to continue maintaining facilities and offering the same amenities and level of service that unit owners desire.
Advance notice is advisable
To ensure compliance with increased common charges, condominium associations should provide as much advance notice as possible to residents before the new rates take effect. Many boards may hold an informational meeting or issue a newsletter explaining the changes in the budget which warranted the increase.
Board members may need to be ready to defend the amount of the increase that they impose, especially in buildings where many unit owners are living on fixed incomes or have tight budgets of their own. Such explanations may help reduce the risk that unit owners don’t or can’t pay the increase thereby requiring the building to resort to unwanted but necessary collection activities.
Learning more about the rules that apply to condominium associations and similar entities can help those who volunteer to support their communities avoid legal controversy. Communicating with unit owners as to why the increase was necessary can go a long way in avoiding unhappy or dissident unit owners.