Understanding Your Condo Budget: What Owners Should Know

Buying a condo means you’re not just investing in your individual unit—you’re also sharing the costs of maintaining the entire building and common areas. That’s why understanding your condo association’s budget is so important. Here’s a guide to help you make sense of where your money goes (and what questions to ask).

1. What Is a Condo Budget?

Every condo association creates an annual budget outlining how much it costs to operate and maintain the property. This budget determines your monthly dues and any special assessments that might come up.

2. How Are Dues Calculated?

Your dues are typically based on your unit’s share of ownership. They cover things like:

  • Building insurance
  • Common area utilities
  • Landscaping and janitorial services
  • Management fees
  • Reserve contributions

Some condos include water, sewer, or even cable in dues—others don’t. Every association is different, so always ask exactly what your dues cover.

3. What Are Reserve Funds?

Part of your monthly dues goes into a reserve fund. This is money set aside for big-ticket items like:

  • Roof replacements
  • Elevator repairs
  • Exterior painting
  • Major plumbing work

Healthy reserves help avoid sudden special assessments. Many Washington buyers will review a reserve study as part of their due diligence.

4. Special Assessments

If there’s an unexpected expense the reserves can’t cover (like emergency repairs), the board may issue a special assessment—an extra amount billed to each owner. This is why it’s smart to:

  • Ask about past assessments
  • Review the current reserve study
  • Understand upcoming projects that might trigger future costs

5. How Is the Budget Created?

Typically, the board and the management company draft the budget annually, then share it with owners. Some associations vote to approve the budget, while others don’t require a formal vote.

6. Questions to Ask Your Condo Board or Manager

Every condo is unique. Before buying—or at your next annual meeting—consider asking:

  • What’s included in monthly dues?
  • When was the last reserve study completed?
  • Are there any planned major projects or assessments?
  • How much is in the reserve fund?
  • Has the budget increased significantly in recent years?
Reminder: Every condo association is different. Always read your governing documents and financial statements carefully, and don’t hesitate to ask your board or management company for clarification.

Understanding your budget helps you avoid surprises and plan confidently for the future.