The owner of each unit in a condo building pays common charges, which are monthly fees that cover the building’s amenities, services, and upkeep.
Common charges may include building staff salaries, management fees, and amenities such as heat, gas, and parking. The range of amenities that common charges cover varies. Of course, the more they cover, the more they are likely to cost.
Condo owners must pay common charges every month in addition to their mortgage and taxes. Therefore, it is vital that buyers check the common charges for potential units when looking for condos.
What’s more, common charges will vary across the different units in a building. The square footage of a condo unit and its location in the building determine how much that unit’s owner contributes to charges. This distinguishes condos from co-ops, where all owners pay the same rate.
How much do common charges cost?
Common charges vary greatly from as little as a couple hundred bucks per month to several thousand per month for massive, $10 million condos.
You can find the common charges for NYC condos on real estate data and insights platform Marketproof. Just go to the homepage, search for a building, and click on the Units tab on the building page. Click on a specific unit, and you’ll see the common charges.
For example, the common charges of a $789,000 one-bedroom in a brand-new development at 116 India Street in Greenpoint, Brooklyn, are advertised at $285. (See the lower-right corner of the screenshot below.)
By contrast, a $13 million penthouse at The Benson, a luxurious new development on Madison Avenue, will cost the buyer $7,147 in common charges.
Notice that the above unit in The Benson is classified as shadow inventory. This means the developer is not publicly listing it.
This is a unique benefit of Marketproof New Development, a Marketproof subscription service. Marketproof’s proprietary software collects data from real estate databases to show you information on new condos unavailable anywhere else. That includes shadow inventory that is available but not publicly listed. It also includes info on comparable sales that will help you negotiate as you search for a brand-new condo.
Check out Marketproof New Development for the most information anywhere on NYC condos.
How do you pay common charges?
The condo board collects these charges on a monthly basis.
The condo board may also take legal action against owners who are behind on their payments. Delinquent owners may receive a written warning from an attorney threatening legal action. The condo board may also file a lien against the property, which could lead to foreclosure.
Can common charges increase?
This monthly expense may increase for a variety of reasons over the life of a condo. For example, energy costs could jump or the board might need money for renovations. Some increases, such as those for upkeep projects, will be temporary, while others endure for years.
Unfortunately, condo owners have little power to fight charge increases. However, owners can run for the condo board to try to change how the board manages the building.
Can prospective buyers negotiate?
Buyers can and should negotiate on this front, especially in a buyer’s market. Developers may cover as many as several years of common charges to encourage buyers to close.
Marketproof empowers prospective buyers to craft the best possible offer price by providing the most comprehensive data anywhere on NYC condos.
Getting started with Marketproof
For new developments, check out Marketproof’s subscription service, Marketproof New Development. For opportunistic buyers undeterred by some risk, 2021 offers an opportunity for NYC condos that hasn’t been seen for a decade. Marketproof research shows that if you bought a condo in Manhattan in 2009 and sold in 2018, you would have seen more than a 50% return ($890 ppsf to $1430 ppsf). Now, condo prices have retreated 20% since peaking in 2018.
With Marketproof New Development, you can easily search both publicly listed properties and unlisted off-market properties not available on popular listing sites. Marketproof can increase the inventory you see by 9-10x what you may see on other sites. Create an account today, and get a 7-day free trial.
Top photo courtesy of 85 Jay Street.