Q: What do condo homeowners dues typically include and what should I know about them?

A: If you are thinking about buying a condo it is important to know what is included in the monthly home owner association (HOA) dues. HOA dues nearly always include what I call the basics: water, sewer, garbage, insurance for the building and the common areas, maintenance for the interior and exterior common areas, landscaping expenses, the management fee (if there is a management company—some small associations are self managed) and a contribution to the reserve fund, which accumulates funds for future expenses. A well run HOA should have a reserve study that will project future expenses such as when a roof might require replacing. A reserve study serves as a guide for the periodic monitoring of HOA expenses and helps to determine any necessary increases in the HOA dues. The reserve study is required to be reviewed and updated annually. See the Oregon Condominium Act Section 100.175, 3a.

Sometimes a condo projects will have central hot water, gas cooking, a gas fireplace, or basic cable services which might also be included in the monthly dues. In recent years, some of the newer buildings have central water-based heat pump systems and these efficient systems can deliver basic heating and cooling at substantial savings to the homeowner. The homeowner ends up paying the electrical costs for the fan system but the basic heating and cooling is included in the HOA dues.

When looking at condos, a buyer should list all the items included in the HOA dues in order to be able to clearly evaluate and compare the monthly costs for different condominium projects. Typical HOA dues are based on the size of the interior of the condo and can range from .24 per square foot per month to a high of .49 per square foot per month. The difference can be significant but make sure you know exactly what is included before making a decision. Sometimes higher dues, if they include extras such as central hot water, cable tv and the efficient central heating systems might actually be a better value.