Philadelphia Real Estate Blog

Center City Philadelphia
Condos and Lofts

 

Subscribe To Receive
 Blog Updates By Email

Calendar

December 2018
M T W T F S S
« Oct    
 12
3456789
10111213141516
17181920212223
24252627282930
31  
 
 

January 31, 2018

Answering Philly Condo Reserve Questions

Filed under: For Buyers,Of Interest to Buyers,Real Estate: Condominiums — Center City Philadelphia Real Estate Agent @ 2:53 pm

Here are a few condo reserve questions I often get asked:

1) How much money does a certain condo association have in its kitty?
You really are not going to know the answer to that question until you purchase the condo and review the condo docs. The state of Pennsylvania allows for a five-day review of condo docs for you to make an informed decision. Some buildings stockpile a boatload of $$ – and others simply just assess when needed. I usually find that the very small buildings and the very expensive/exclusive buildings in town don’t keep that much $$ on hand- their way of making improvements is to simply assess owners when needed.

2) How much in reserves is required by Fannie Mae for the building to be “warrantable?”
Although there is no set amount (for the ability of buyers who want to buy in a particular building), it is probably a good idea to be setting 10-15% aside every month for capital improvements.

3) What are capital expenditures?
Reserves for deferred maintenance (performed less frequently than yearly in order to maintain the asset’s useful life) and capital expenditures (purchasing or replacing assets that have a useful life over one year) are required for certain building components unless the board votes annually to waive and/or reduce reserve funding.

4) WTF is a capital contribution???
Buyer pays two months worth of condo fees into the ASSOCIATION- this does not go to the seller and this helps to build the kitty for future improvements. You do not get this payment back when you sell the condo and it is not a pre-payment of condo fees.  This contribution is now applicable for almost ALL condo sales in town.

5) How much should my Philly condo association have in reserves?
This really is a function of the board’s goals and the current condition of the entire parcel including the roof, windows, elevators, etc. Most folks I speak with suggest 10% -15% of the TOTAL annual intake of condo fees to help build the kitty. A professional reserve study may be in order to best guide an association.

Email me for details and I may be able to help with this. 🙂

Mark Wade 
www.CenterCityCondos.com | BHHS Fox & Roach Realtors
530 Walnut St. #480 | Philadelphia, PA 19106
Mark@CenterCity.com | 215.521.1523

Tags: , , , , ,

• • •

 
 

530 Walnut Street, Suite 480
Philadelphia, PA 19106
Direct: 215.521.1523 ~ Office: 215.627.6005
Fax: 215.627.3142
Email: Mark@CenterCity.com
Copyright Mark Wade | All rights reserved.
Site Admin | Log Out