Who pays for common area charges and how?
Some condo association members feel they are constantly over-assessed for everything from common area repairs to renovations. On the other hand, the association often doesn’t have enough cash in reserves to cover any of these costs, but feel its in the HOA’s best interest to take on these projects. In a perfect world, the condo association board has designed and implemented a budget that is able to fund all operational costs along with any projects envisioned for that fiscal year. As we all know this is often not the case. This can leave the association in a bind with ill-will from condo owners who feel they are getting an unjust assessment because the condo association didn’t plan properly. The best solution to pay for these common area charges is always to take from the operating or reserve accounts – if there is enough cash. Otherwise, the best funding alternative today may very well be an HOA loan for 100% of the project cost or a mixed funding solution of debt and assessment. This
