If you’re purchasing an apartment, condo, or co-op in New York City, you’ll be faced with a few more fees than you might have originally planned. In addition to the mortgage and property taxes, you’ll likely have to pay a few extra charges that coincide with living in a multi-unit building where there are common areas and shared amenities or services. Here’s what you should expect.
What Do Common Charges Include?
If you’re living in a shared building, you and the other residents will be responsible for sharing the costs of building maintenance and insurance, as well as any operating costs that the building may incur. These can include physical items like decorations, indoor plants for common areas, and general beautification of the building, as well as services like heating, gas, electricity for common areas, trash pickup, and snow removal. If your building includes amenities like a gym, swimming pool, indoor parking, or storage areas, you’ll be sharing the cost of these as well.
If you own a co-op, take note that these common charges are listed as “maintenance fees” for the building. However, with a co-op, this fee also may include property taxes and salaries for building employees like the doorman and maintenance workers. Make sure you understand the property type so that you can better comprehend the extra fees.
How are Charges Determined?
The common charges and maintenance fees you can expect in your new property are determined by a number of variables that may change from building to building. Primarily, the size of the apartment, including the number of total rooms and square footage, will affect that cost the most. Usually, the percentage of the building that your unit takes up will be calculated for the common charge, which means that if your condo or apartment is much larger than many of the other units in the building you may be paying a higher fee than those with smaller units.
Other elements like the floor number and view will also play into the common charge, as they factor into the value of the apartment compared to the value of the building as a whole. Overall, the more desirable the unit, the higher your charges are likely to be.
When Fees Increase
When you are looking at the fees and charges associated with your chosen property, it is advisable to look not only at the current rate but also at trends for the property fees during that last few years. Since common charges and maintenance fees are not constant, you’ll want to be aware of what items factor into those changes and how they are likely to change in the future.
When you’re looking into a property before your purchase, ask the seller for a detailed report of these fees and ask what the specific reasons are for any increases or decreases in charges for your particular unit. You can expect these charges to be adjusted according to any seasonal issues that may require repairs to the building, such as frozen pipes, higher AC usage in common areas, or flood damage to shared spaces. However, if the seller doesn’t give satisfactory reasons, or has none at all, then this might not be the right property for you. Essentially, you’ll want to know what you’ll be paying for the cost of these charges now and what you can expect to be paying for in the future.