As you have been searching around online for Ocean City MD condos for sale you have probably noticed the condominium fees that are noted on each listing. A majority of the Ocean City MD condos for sale have monthly condominium fees associated with them and there tends to be a lot of confusion as to what they cover. As a full time Ocean City MD Realtor I am often asked what these fees are and what is included. I thought it would be helpful to write a quick post explaining what condominium fees are as they pertain to Ocean City MD real estate.
Ocean City condominium fees cover the general maintenance, operation and upkeep of the particular building or community the Ocean City property is a part of. Condo fees cover building insurance, common area maintenance, professional property management, amenity maintenance, reserve build up, trash pickup, subsidized water usage and more. A budget is determined for the building and then divided amongst the units that make up the entire project. This is typically based on the size of the particular Ocean City condo relative to the other units in the building. A 3 bedroom condo will pay a larger percentage of the maintenance costs than a 1 bedroom unit in the same building. All Ocean City condo buildings set up their own structure as to how they operate, however there are some common similarities among a majority of them.
Ocean City Property Insurance
A majority of the condo fee covers the unit’s fire, flood, hazard and general liability insurance. There is a master insurance policy in place that covers this insurance for all of the units in the building and for the common elements. The only insurance you are typically responsible for is known as content insurance which covers your furniture, appliances, personal items, etc. This is relatively inexpensive and a rider policy is typically purchased from the insurance company that has the master policy on the building. In the event that there is a problem this ensures that everyone is dealing with one insurance company as opposed to multiple groups, which as you can imagine would be a nightmare.
Professional Property Management
A majority of Ocean City MD condo buildings hire a professional property management company to handle all of the affairs of the building. They will handle the accounting, bill paying, preparation of resale documents, property inquiries, scheduling of maintenance, coordination of condo association meetings, etc. Property management companies are experienced in these matters and make for a well run and proactive association. Some buildings choose to self manage themselves and save on the property management costs.
Reserve Build Up
A portion of the condo fee goes into building up the reserve account for future maintenance, repairs and any unforeseen items. This is a good thing as it helps to alleviate the possibility of future special assessments and keeps the building in good condition, which ultimately preserves your Ocean City MD Real Estate investment. A lot of mortgage lenders will not lend on buildings that do not have adequate reserves or funds allocated to build them up. Typically 10% of the budget for the particular Ocean City MD condo building is set aside in the reserve account.
Common Area Maintenance
A portion of the condo fee goes toward the maintenance and upkeep of the common areas in the building which all of the owners share an interest in. This will include such things as landscaping, roof maintenance, walkways, fire suppression systems, railings, siding, etc. You are essentially only responsible for the maintenance and upkeep of the interior of your Ocean City Maryland condo.
As the amount of amenities that a Ocean City condo building offers increases so does the condo fee. Amenity maintenance will cover usage, upkeep and repairs of pools, elevators, fitness centers, boat docks and bulk heading, tennis courts, etc.
The condo fee will cover the common area utilities such as electric for exterior lighting and running the elevator, heating and running the pool, trash, etc. Some associations also include basic cable and wireless Internet in the condo fee.
These are some common similarities that I see as an Ocean City MD Realtor in a majority of buildings. Each building presents its own unique circumstances and ownership group. Once you make an offer that is accepted to purchase a condo for sale in Ocean City MD you will have a 7 day review period per the Maryland Condominium Disclosure. The Maryland Condominium disclosure is a separate addendum that is added to our contracts of sale for Ocean City MD real estate purchases. The disclosure requires that the Seller provide a resale package for the condominium to the Buyer within 15 days of settlement. This resale package will included copies of the bylaws, building rules and regulations, copy of the insurance binder, building budget, minutes from the most recent condo association meetings, resale certificate ensuring the unit is in good standing, etc. This process essentially allows you to review the building and Ocean City MD condo association that you are buying into. Once you receive this resale package you have 7 days to review the information. During this period we can get answers to any questions about the building or association that you may have. Should there be something that is not satisfactory to you and we cannot get it resolved, you can then be released from the contract within this 7 day window. Your deposit will be returned to you and you can move on to pursue another Ocean City MD real estate option.
I hope this post helps in explaining what Ocean City condo fees are and what they cover. All in all you don’t want a condo fee that is too high as the result of poor management or allocating for unnecessary items that will ultimately drive your monthly costs up. At the same time you don’t want one that is too low that will lead to possible special assessments, a deteriorating building or an inability to obtain financing. As an experienced Ocean City MD Realtor I will assist you in reviewing the condo disclosures to ensure you are buying into a well run building that will provide the best investment.
As always we would be glad to discuss this or anything else regarding Ocean City Maryland or Ocean City MD Real Estate in greater detail with you. Feel free to contact us directly anytime at 443-614-9179 or by email. Have a good day and I look forward to the possibility of assisting you with your Ocean City Maryland real estate needs.