The common charges, or “CC,” is a monthly expense that can add hundreds or thousands of dollars to your monthly condo payments.
What does the common charge include?
Common charges cover “common services and amenities” shared by other condo residents, including the management fees and operating expenses for a condominium building. Taxes are billed separately.
(In co-ops, this fee is known as the maintenance fee and covers real estate taxes, insurance, amenities, operating costs and building mortgage payments. See differences between condos, co-ops and condops.)
Other items sometimes included in common charges are:
- Heat and hot water
- Electric for common areas
- Plants and flowers in common areas
- Bike room or storage room
- Pest control
- Parking spots
- Snow removal
Before you start feeling comfortable about the monthly mortgage payment, make sure to ask how much common charges are and ask what is fully included in the common charges for a condo unit you want to buy. These items vary greatly and can have a real impact on affordability as well as value. This is important not just for you now, but for resale value, too.
How are common charges set?
- Common charges are calculated by taking each condo unit’s “percentage of common interests” and multiplying this number by the total operating costs of the building.
- Percentage of common interests is mostly dependent on the square footage of the condo unit and the unit’s location within the building.
- While you may pay more proportional commons fees for a bigger or more desirable condo unit, you will not necessarily gain any significant benefit other than added votes on matters with the condo board.
- Just like with co-ops, common charges in condos usually increase in relation to how many amenities and staff service the condo building offers.
- And just like co-op boards, condo boards also implement assessments or higher common charges when needed, so expect potential fluctuation for roof repairs or wage increases for doormen or other capital expenses.
Beware of future increases in common charges
Not only should you pay attention to the current common charges figure, but you should look into the trends in the charges for a building. It’s wise to ask the seller or seller’s broker about reasons for increases and decreases in the charges for a unit.
It’s also wise to seek information on how the condo board tends to spend and what activities or projects it may consider implementing in the near future. For instance, has the condo board moved to reduce utility or electric costs by improving building systems, like LED lights or solar panels?
The more information you get about the habits of the condo board’s activities for commons fees, the better decision you’ll be able to make about whether this building is right for you. You may love the unit under consideration, but there is a bigger picture and common fees are an important part of that.
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