Common Misconceptions in Communities
It is quite normal to hear the story of a person compare their community fee levels between
their property in Madrid, Munich, London or Stockholm and their newly acquired property on
the Costa del Sol. They would like the other owners to believe that lower costs are better simply
because low community fees are cheaper than high community fees. In other words, the
President, board and Administrator should set the fees at the lowest rate possible and make the
services fit. This is contrary to the President’s and the Board’s honorary positions and the
administration’s responsibility. The President’s and the Administrator’s duty is not to keep fees
low. Their duty is to maintain or increase property values and manage all services required for
the property.
If inadequate budgeting is continued for the maintenance and services within a complex, the
resulting neglect can cause owner’s property values to fall considerably.
Comparing fee levels with other associations /communities is meaningless. Fee levels are the
product of a mix icluding size, age, level of reserve funding, quality and quantity of maintenance and statutory specialised services, such as 24-hour security. Like fingerprints each Community is unique.
It is highly unusual that actual costs against budget line items are 100% accurate in the first
few years of any Community’s activities. In most new communities trends in operational
expenditures will become apparent after two or three years and this is the time to adjust costs and
budget.
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