Re: Common cost surcharges
From: Sharon Villines (
Date: Sat, 7 Jun 2008 09:55:21 -0700 (PDT)

On Jun 7, 2008, at 12:00 AM, Shelly DeMeo wrote:

Our community is set up as a condominium. In addition to monthly common
charges, based upon square footage of each home, the community imposes
one-time per square foot surcharges on improvements and additions to
existing homes.

What kind of improvements? Are these existing homes owned or not sold yet?

If the condominiums are new, the residents should be reimbursed for these costs when the units are sold. You would be investing in their development. Developers invest money and are reimbursed when the homes are sold.

 These surcharges often add a substantial amount to the cost
of construction or improvement. While there are several rationales for maintaining the surcharges (which were also folded in to the original unit construction costs), the main one seems to be that the community needs the
funds to make future capital improvements.

What does "folded into the original unit construction costs" mean? If they were included in the price of your units, why wasn't this money deposited into a special account for the purpose of developing new units?

Maybe you could say more about this. It seems like unusual financing. In general, condominiums want to avoid special assessments. It is a sign of a well-managed condo to have NO special assessments. Some lawyers and real estate agents will ask about these and warn off purchasers. In cohousing this is not usually a problem since people want to move in anyway -- it's a specialized market.

But if you are a new community with no track record and still struggling, it might be a problem.

Are owners surcharged
when they improve their property?  If so, on what basis?

We recently installed fence costing over $20,000. We raised funds for this from donations and a fundraising talent show (internal performers and audience) and then saved the money from our operating budget.

We have not funded capital improvements specifically because we were pretty developed when we moved in, but any extra money each year is rolled into this fund. Contributions from members who sell units are put there.

When we moved in, we were very fortunate that the costs of the commonhouse furnishings were included in the costs of our units so we moved in pretty fully set up. People did donate items from their homes as they downsized -- exercise equipement, office furniture, games and puzzles, some soft furniture, pictures and posters for the walls, etc. But we had a stocked kitchen, dining room tables and chairs, living room furniture, etc.

We now have a very detailed reserve study and attempt to keep it well- funded. For costs over $500, we have a Maintenance Reserve for for major maintenance items that occur at least biannually, a Capital Reserve for replacing and repairing any of the items that would affect our capital investment (resale value of the units), and an Emergency Fund for unexpected expenses. We also have insurance.

For us a special assessment would be rare.

But for a self-developing community, it may be very different. But I would think there would be a plan for reimbursing you for these assessments.

Sharon Villines
Takoma Village Cohousing,Washington DC

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