A low monthly HOA fee looks like savings. In practice, it often signals deferred maintenance. A large, unavoidable bill is heading toward the owners.
Thomas Beattie is Co-Founder and CEO of Eli Report, an AI-powered condo and HOA document review platform based in Vancouver, Canada. Over more than six years, his team has reviewed the bylaws, financial records, and other official paperwork from nearly 15,000 communities across North America, according to the company’s own figures. He sees a recurring mismatch between what buyers celebrate and what a building’s finances actually indicate.
Condo communities share major capital assets: roofs, elevators, plumbing systems, parking garages, and windows. These assets wear out on predictable timelines, and the money to replace them has to come from somewhere.
When a building keeps fees artificially low, it isn’t eliminating those costs. It’s postponing them. “Everybody wants lower fees. They think lower condo fees are a good thing,” Beattie says. Low fees often mean the board has chosen to delay projects or skip preventive maintenance. “That means that they’re pushing out projects, they’re not doing enough maintenance.”
The result isn’t a smaller bill. It’s a larger one that arrives all at once as a mandatory lump-sum bill, sometimes called a “special assessment,” that can run tens of thousands of dollars per unit, instead of being spread gradually through monthly contributions.
A reserve study, essentially a maintenance forecast prepared by engineers, projects when major systems will need replacement and how much that will cost. It reveals whether a building is saving enough. Not every U.S. state requires these studies, so many buildings operate without a clear picture of their future obligations.
In buildings with a reserve study, Beattie’s team projects when owners can expect to pay, how much, and for what. A buyer might discover that a building expects a $5,000 elevator assessment in 2030 and a $40,000 window replacement levy in 2035. None of that appears on a listing sheet. It’s in the documents, if the buyer knows to look.
When a building has no reserve study, there’s no engineered timeline, no projected cost, and no way to evaluate whether current fees are adequate. That absence is itself a risk factor.
Condo fees have risen sharply over the past five-plus years, according to Beattie. He expects them to climb further as buildings catch up on deferred obligations. The squeeze falls hardest on owners with the least flexibility, particularly retirees on fixed incomes who can’t absorb rapid fee increases or large one-time assessments.
Beattie notes that some of these owners are eventually forced to sell. Timing matters enormously. An owner who sells before a major project begins can still attract normal buyer interest. An owner who tries to sell during a project, with a large outstanding balance and construction disruption, faces nervous buyers and steep discounts. “That’s going to lead to bigger, nastier surprises in the future,” Beattie says of buildings that continue to defer.
Rather than celebrating a low fee, condo buyers can look for signs that a building is funding its reserves responsibly. A current reserve study, a reserve fund that tracks close to the study’s recommended balance, and a history of incremental fee increases all suggest a board managing costs proactively rather than deferring them.
Beattie frames the core misunderstanding directly: “You are not just buying your unit, you are buying your share of everything else.” That includes the roof over every unit, the garage beneath the building, and the elevator that serves every floor. If the monthly fee seems surprisingly low, the real question isn’t whether the buyer is getting a deal. It’s who will pay when those shared systems fail.
Buildings where reserves are fully funded may charge higher monthly fees. But those fees reflect honest accounting. A building charging more per month with healthy reserves may cost less over a decade than a building charging far less with a large special assessment looming within a few years.
About the Expert: Thomas Beattie is Co-Founder and CEO of Eli Report, a document review platform that has analyzed close to 15,000 condo communities across North America since launching in 2019.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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