Condo's and fees in Charleston/Mt Pleasant area (Isle of Palms, Sullivan's Island: flat fee, for sale)

[Maryjane55us]

I need to learn about the "extra costs" to be aware of, as I've never been a condo owner. Regime fees, assessments, hidden costs, etc.

I've seen lots of sales and affordable listings in Montclaire.. an older establishment but convenient to shopping and IOP. Then I discovered there was a $3000 flat fee for an increase in insurance. Is that why there is a mass exodus and lots of competitive listings for sale? Can they just surprise condo owners with "assessments" to improve the property like this?

I liked the photos of the Legends in Mt Pleasant, then learned they were originally built as apts and are converting. And on one online site, there were lots of complaints from former tenants about noise, thin walls and bad management.

Then there are Park West condos undergoing renovation promising lots of extras.. but the costs are "vague".

And Downtown Charleston has several beautiful, yet very small units in historic (ie.. old) buildings, very pricey of course for sq/footage. I've vacationed in quite a few downtown historic spots and they all seem to have lots of problems.. lost electricity for hours.. shorted out circuits, plumbing problems, etc.

Then there's IOP condotels.. no telling the costs involved there. But an interesting idea.

I'm actually finding that a lot of the newer subdivisions being built by mass market builders are cheaper than the "used homes" for sale. But again, it all has to do with "location" I'm sure.

Any help?

[USCJoe]

You are not alone in being concerned about additional fees involved in many condo communities. Many of the condo complexes in the Charleston area including in the town of Mt. Pleasant have seen increases in their monthly regime fees due to increased insurance costs/premiums.Most true condo association ownership will entail a monthly regime fee to include include insurance on the structure but not necessarily on the interior of the structure, outside maintenance on the structure and upkeep of the surrounding grounds and at times pest control and water. Keep in mind that by covering these items, the home owner will be saving on similar expenses that they would pay out of their own pocket should they live in a single family home or true townhome.
The monthly regime fees in Montclair did go up drastically in 2007 to cover increased insurance costs. There are other condo complexes that have not gone up too much in 2007, although those condos may experience increased insurance costs in 2008. Much of the increased inventory that you see from a year earlier, particularly in condos, is probably attributed just as much to recent condo conversions and new construction that was started or in the planning stage prior to the downturn in the market about a year ago than to increased monthly condo fees. Each condo is going to have a different set of covenants and restrictions setting forth what the property owners association can do or not do. A condo association like a home owner must keep insurance on their property as long as there is an outstanding mortgage on the home or condo units. For this reason, an owner of a single family home or condo is pretty much between "a rock and a hard place" when insurance as well as property taxes increase on their residence.
As I have pointed out in prior postings, real estate taxes in the Charleston area are relatively low compared to many areas of the county and even with the increase in insurance costs, total monthly payments will often be a good bit lower than in high cost living areas particulalry when you take the cost of the homes into consideration.
In general, new construction in the Charleston area will be more than a pre-owned home, all things being equal. Most of the new construction in the Charelston area is going on more and more further from downtown Charelston where land and cost of construction is cheaper.Thus you are right in saying that location has a lot to do with this observation.
As in any major family decision such as relocating to a new area, a buyer should do their research, arrange their priorities and plan for unexpected expenses that could occur in a "worst case scenario" before making a relocation and home purchase decision. Although I am prejudice, I think that a buyer can minimize the potential for unexpected expenses in a home and housing community by employing an experienced Realtor who has a good feel for different builders, developers, geographic areas and institutional knowlege of the local real estate market.

[Maryjane55us]

You are a valuable source of information, Joe.

Another question.. I noticed on one particular condo it added that it had a "rental license". So, if you decided to buy a condo and eventually decided you wanted to rent it out, does one need to have a rental license to do so?

If we can ever decide what we actually want to do, I'll certainly get in touch with you.

[USCJoe]

I suspect that comment refers to a home on the Isle of Palms where for the someone wanting to rent their home out needs to get a yearly rental license. The requirement was implimented a few years ago. I believe there is a set fee in the $200 range plus a small percentage of the gross rental income anticipated for the year. Most homes on Sullivan's Island cannot be rented out on a short term basis unless they had received permission from the town to do so many years ago or the property for sale is "grandfathered in". However, most home owners in the Charleston area may rent out their homes without paying a munincipal fee, although if they live in a typical subdivision or condo complex the covenants and restrictions will generally not allow more than a 6 month or yearly rental.

[fbyerly]

Is there a site one can go to get a list of the condos in the greater Charleston area and the regime fees of each one? I feel the condo I live in has increased regime fees drastically the last couple years. I see similar condos advertised in the real estate section of the Post and Courier with much lower fees and wonder how mine compares with similar others. F.Byerly, Grove Park

[kelb]

Interesting thread. Can anyone throw out some actual numbers? We live in a 2000 s.f. condo in PA, and pay $233 per month association fee. It's a bit high for this area, but it covers a lot of services. There are only 30 units here, so that keeps the cost a bit high, and going higher every year. Is $233 high or low compared to what people are paying in Charleston area? Also what does the fee cover. Ours covers all landscaping, exterior repair and cleaning, snow removal. Does not cover trash removal, driveway maintenance, deck refinishing.

[USCJoe]

The monthly condo fees are going to vary dependent upon the community, location, amenities offered, age of community/facilities, capital fund and particularly insurance costs to the home owners association. In the Charleston area, most monthly condo regime fees will be in the $150 to $350 range, although there are certainly exceptions, particularly those associated with luxury condos and those near the beach and/or high flood zone. Generally the regime fee will cover outside maintenance and repair, landscaping, building and flood insurance, pest control and occasionally water. Trash removal is generally covered by your local property taxes.

[Maryjane55us]

I, for one, would like for realtors to give some downright specific costs for each condo area. They tend to avoid it and just give you a guesstimate like they are whispering it. Those *hidden* costs can make or break a deal and they need to be upfront about them.

This is a MAJOR monthly additional cost to be considered in condo purchasing. In many cases, it's as much as borrowing an additional $50K/yr or more that would make a SFR more affordable.

Montclair condos obviously added this huge insurance adjustment that caused many of their owners to put their condo on the market and it began devaluating their properties long before the RE bubble burst.

The reason I ask this is because of some of the stuff going on with the Marias condo's. Seems that there is some major assessment going on with replacing roofing that is not mentioned in the sales prices.

Things like this scare me away from condo's. For instance.. what are the *actual* costs for Long Grove condo's? What about upcoming assessments?
New roofs will need replacement? The pool needs to be fixed? How do you know you're not going to become a victim of a new huge bill for assessments each year??

[USCJoe]

A good Realtor in representing their client will confirm with the relevant home owners association the annual regime fees and any special assessments currently in force or planned/anticipated. Monthly regime fees are certainly important in one making a buying decision. It is up to your Realtor to get the current facts and figures connected with the purchase of a condo. I would not necessarily rely on the figure found on some real estate listings, as they may be inaccurate or outdated. Monthly fees will often change from year to year. Special assessments could be implemented at any time. Your Realtor can easily make an offer contingent on confirming any regime fees in place or planned, any ongoing or filed law suits as well as obtain a copy of the financial records of the association available to the home owner.

[mrpeatie]

If by Marais you mean the condos/townhomes at seaside- I heard the issue was improper flashing and subsequent damage. There was supposedly a lawsuit.

Not sure if that was indeed the final cause or what happened. I know Planter's Place was in court within about two years of being flipped by Trademark and they won their suit but everybody was still paying through the nose.

I think the reasons realtor's are hesitant to be decisive on the HOA issue is because they do not know what actually goes on in associations or with the managers. I lived in a complex that seemed to have reasonable dues til they went through the roof becuase of both insurance and a long term lack of savings. The best thing to do is call the HOA/regime manager and confirm the regime cost. I actually looked at a couple of places that had fudged numbers (the owner put one thing on the MLS diclosure forms and the realtor didn't know better although I think it was my realtor who noticed it about one.) Also ask if there is a transfer fee for selling existing units to new purchasers. The other thing is to ask how much money is in reserve and then what the age of roofs, siding, paint, etc was. Ask about a maintenance schedule also. Because what may seem like a lot of money won't go far on 15-20 buildings. If the answer is we address thing as they come up then its either very well run or they mean they put everything off til the roof leak like a siv and terminex is looking into Uranium powered baiting.

As I posted in similar threads I was in a complex when the current owners payed the price for about 20 years financial neglect by previous boards and managers. I ended up on the board and will offer the biggest problem with condos. No one wants to pay more dues, some simply refuse until you slap a lein on them after a year, others form lynch mobs questioning the cost of everything even when they are provided full documentation (copies of bills/contracts) and when you get behind on maintenance and repairs for a complex it is very hard to catch up.

So buyer beware- don't be too attracted by fees that seem really low without checking thoroughly.