Every buyer of a condo or co-op should anticipate that at some point an assessment will be placed on all owners to collectively share in the cost of a building upgrade or repair. Miraculously, some of these owners and buyers either cannot wrap their heads around this reality or choose not to. I'm often surprised by how sometimes even the more sophisticated consumers amongst us don't understand this, fight this, or simply don't believe this is possible.

Most condos around the globe collect enough monthly charges to cover the operational costs of running a building combined with some additional funding to fuel a reserve fund for emergencies. Some choose not to build up much of a reserve fund and instead rely mostly/purely on assessing owners when needed for capital improvements. Why? All/most assessed building capital improvement expenses can become part of your cost basis, an expense on your balance sheet that often results in tax savings upon resale by reducing your capital gains, if there are any.

There is an automatic assumption that if you owned a single family home and your roof needed to be replaced, you'd be the one paying for that. Oddly, some condo owners think that expense should be someone else's responsibility. Many do not account or budget for what is almost a certainty somewhere down the road. Every property has components and mechanicals that have a shelf life. A roof may last 20 years. A facade may need repointing every 10 years. A boiler might need to be upgraded or replaced every 20 years and so on and so on. For a building to maintain its desirability, common areas and amenities might need re-decorating or renovation.  Just like a single family home.

Budgeting for this inevitability is imperative.