Living in a condominium community means that each unit has a vested interest in contributing to the quality of the property and thus the value of each owner’s investment through fees appropriated by the Board and rules and regulations maintained by the Board. Each owner has a percentage interest in the ownership of the community’s common and semi-common properties. The Association is responsible for maintenance of the shell of the property (for example but not limited to: items outside the studs of each unit including the roof, walls, patios, walkways, driveways, roadways, external lights, mailboxes, landscaping in the common areas, snowplowing, lawn maintenance, etc.). Any changes to any external part of a unit must be approved by the Board. The City of Beachwood does require permits for some types of modifications within a unit. Specifics about these responsibilities and regulations are contained in the Association’s Declaration and Bylaws.
The Budget
The Board takes its fiscal responsibilities very seriously and manages contracts and vendors who provide the services needed for incidental, annual, and major projects. The Board also looks for ways to maximize earnings on its investments (all in FDIC-insured accounts). Each month the Board pays for common costs such as lighting, sewer fees, water fees (including maintenance of the fire hydrant), trash collection, plowing, landscaping, legal fees, etc. At present the annual budget is expected to increase by 5% each year but this may vary due to economic conditions. The budget is created in October of each year, discussed with the owners at a special meeting, and finalized in November. Costs are allocated and thus shared by the owners based on the square footage of the unit as indicated in the Declaration, as amended (called the “Percentage of Interest = unit square footage / total square footage of all units).
In the event that a major project is necessary and the Capital Reserve fund is not at a level that is adequate to support that cost as well as maintain scheduled capital projects, an additional assessment per owner will be levied. This is an extraordinary event and would occur after research by the Board and consultation with the unit owners.
Monthly Fees and Other Costs
Each unit’s monthly fee contributes to the budget: 34% toward the Capital Reserve Fund, and 66% toward annual operating expenses. Monthly fees increase each January with unit owners notified of the increase in the prior November. Fees may be paid by personal check, bank-sourced checks, or monthly debit.
In addition to the monthly fee paid to the Association, each unit is responsible for the following external charges for its own unit:
- Annual real estate taxes, payable directly to Cuyahoga County
- Electrical, water, sewer, internet, cable, telecomm, and HVAC costs paid to providers
- Homeowner’s insurance (required)
Capital Reserve Fund
Every three years the Board commissions a Capital Reserve Study performed by a professional engineering company. This study provides critical information to the Board for long-term planning regarding the maintenance of the physical plant of the community. (Each month, 34% of monthly fees paid by owners are dedicated to the Capital Reserve Fund.) The Capital Reserve(CR) report contains the following:
- An assessment of the current physical plant (roofing, buildings, concrete, etc.) and determines the anticipated lifespan of materials, cost of replacement or maintenance, and a spending schedule to accomplish same in the following 30 years
- An inflation factor which assists the Board in determining the annual increases in the Capital Reserve fees paid by each unit (see Budget above)