Ownership has its privileges
The Remington is the essence of Manhattan high-rise opulence, but in Westwood. Its elegant lobby is outfitted in polished limestone flooring and white oak paneling. Residents have access to a 24-hour valet, a library, a wine cellar, an English garden, a sundeck, a heated lap pool and an “entertaining salon” with a catering kitchen.
Luxury comes at a price, and the Remington, an upscale condominium building in the Wilshire high-rise corridor where a two-bedroom unit was recently listed on Realtor.com for $1,095,000, is no exception. Residents pay for the privilege of swinging mallets on the croquet lawn with some of the steepest homeowner association (HOA) fees in Los Angeles County, ranging from $1,800 to $2,600 per month.
Remington resident Saul Brand believes the dues are worth it. “The HOA fees are dear, but you’re getting value,” he said. “Our automobiles are parked, all groceries and packages are carried upstairs, and the fitness room is immaculate. It’s everything one could want as far as creature comforts are concerned.”
All condominium owners pay monthly mandatory fees to cover the cost of maintaining a jointly owned property. These HOA fees can range from as little as $100 for a simple, apartment-style condo in the suburbs to $2,000 or more for a luxury high-rise in town, according to a sampling of Southland real estate agents.
Residents of cooperatives and planned unit developments, typically subdivisions of detached homes with a community center or pool, also pay monthly dues. But a homeowner fee, unlike the interest on a mortgage payment, is not tax deductible.
Homeowner dues also play a role in qualifying potential buyers for loans. Mortgage lenders look at several factors when qualifying a buyer for a condo purchase, including the HOA dues and what they cover.
“I ask what their budget is for the residence, and they’ll say $2,000 a month,” said Dan Hapner, a mortgage broker in Westlake Village. “Well, that’s $2,000 to go to the mortgage payment itself. On top of that, we have to add in the HOA.”
Sometimes a single-family house is the better option, even if the mortgage payment is slightly higher.
“If the buyer could buy a house for $300,000, maybe they could only buy a $250,000 condo,” said Pasadena real estate agent Andrea Beal, who has specialized in condominium sales for 13 years.
While many condo owners find HOA fees acceptable, provided the dues cover basic amenities such as insurance, water and cable TV, some prospective buyers believe the fees are too high and offer little value.
“If you’re paying $2,000, that’s incredible,” said George Chang, who recently moved from a house in Sherman Oaks to a Brentwood-area condo where the HOA fee is $250 per month.
Chang first looked for condos in the Wilshire corridor but felt the area’s HOA dues were too high. “You could pay $400 a month, and all you do is get to live in a high-rise. There’s no pool, no workout area.”
While Chang’s new condo complex also lacks a pool, it has a garden and secure parking. “You don’t get a lot,” he said, “but the price is reasonable.”
What’s an average homeowner fee? Although the California Department of Real Estate doesn’t track HOA dues, statistical data are available from Levy & Co., an Oakland accounting firm that compiles statistics for the homeowner association industry. In Southern California, the average monthly assessment for condos, co-ops and planned developments is $138.
However, an average or median doesn’t accurately reflect the wide range of fees. Fees vary dramatically by neighborhood and development. HOA fees in Westwood and Century City average $800 to $900, with the “cheapest, dumpiest building as low as $400,” said Coldwell Banker agent Robert Rosene, who works in the area.
The burgeoning downtown L.A. residential district has a fee range of roughly $200 to $800, according to downtown real estate agent Stephen May.
Zip Realty agent Kurt Swanson, who covers the San Fernando Valley, Glendale and Pasadena, said HOA fees there range from $95 to $500.
The fees typically cover insurance premiums as well as upkeep of common areas, including gardens, courtyards, lobbies, pools and gyms. Some cover additional services such as water and cable TV.
In upscale complexes they often pay for salaries of full-time employees, including doormen, security guards, maintenance workers and sometimes a concierge staff.
Since HOA dues frequently include services that single-family homeowners pay piecemeal, a low homeowner fee isn’t necessarily a good thing; it may not cover water, cable, trash, earthquake insurance and other expenses. Condo shoppers should check to see what the fee includes.
Downtown resident Joy Chen, who pays a monthly $492 fee for her two-bedroom unit in the Bunker Hill area, said she believes she’s getting her money’s worth. “I’m a single woman; safety was a big deal for me. I was looking for a doorman building with good 24-hour security.”
In addition to round-the-clock security, Chen’s fee pays for a common pool and hot tub as well as cable TV and water for her unit. “And if you go away for a week or two, somebody will water your plants or feed your cat.”
It’s important to shop around for the best HOA deal, added downtown homeowner Melissa Robles, who has a one-bedroom unit in the Skyline, at 9th and Flower streets near Staples Center.
“I did a lot of research before I bought, and our condo dues are a lot less expensive than the rest of downtown,” Robles said. Her monthly fee is $348, which covers a pool, two spas, a gym and two 24-hour security guards.
Homeowner dues tend to be lower in low-density, suburban-style developments where a security staff isn’t essential. Dexter Corbin pays $230 a month for his two-bedroom Reseda condo.
“At first the fee looked pretty high, until I saw that it includes water, cable and earthquake insurance,” Corbin said. Some complexes he looked at had HOA dues as low as $180 but didn’t include all the basics.
Condo buyers should be aware that on top of the monthly fees there can be special assessments, which are levied by homeowner associations to pay for repairs or maintenance not covered by the regular HOA fee.
Pasadena resident Frieda Youlios backed out of a condo purchase in her area after learning of a special assessment in the complex where she had planned to buy.
“There was a two-year assessment to repair water damage,” said Youlios, who found out about the extra fee by reading the minutes of a homeowner association meeting, which the association must by law provide during escrow.
HOA fees tend to rise with inflation and insurance premium increases at an average of about 4% annually, according to Levy & Co. However, state law allows a homeowner association to increase fees by as much as 20% annually without a vote of its members.
That said, associations are self-governing bodies consisting of owners in a particular complex or building, and owners generally don’t like to charge themselves more, even if current fees don’t adequately cover maintenance and repair costs.
“Many associations don’t want to raise their assessments,” said David Levy, CPA and Levy & Co. partner. Homeowners “believe the fees will never come back down.”
How much will HOA fees rise in the future? That’s hard to predict, Levy said. While nobody likes to increase expenses, condo developments will continue to age and need repairs.
“Things wear out,” Levy said, “and you’ll need the special assessment to pay for the new roof.”
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Fees, amenities run the gamut
*--* The Remington The Skyline Address 10727 Wilshire Blvd 600 W. 9th St Nearby attractions Westwood Staples Center /Downtown Monthly HOA fees $1,800 to $2,600 $343 to $417 Swimming pool Yes Yes 24-hour security Yes Yes Gym Yes Yes Wine cellar Yes No Library Yes No English garden Yes No On-site manager Yes Yes Valet parking Yes No Tennis courts No No
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List represents only a sampling of the features and services included.
Sources: Remington sales department and Web site, www.the-remington.com; Skyline manager Steve Demoreuille
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Jeff Bertolucci can be reached at jbert@aol.com.
