Condo Fees, Reserves and Documents in Massachusetts

A condominium fee is not rent and it is not optional. It is your share of the cost of running the building, set by a budget the association's trustees adopt, and your obligation to pay it is secured against your unit. The number on the listing sheet tells you very little on its own. The association's finances tell you almost everything.

What does the fee actually pay for?

Typically: the master insurance policy, common-area utilities and maintenance, landscaping and snow removal, management, and a contribution to reserves. What counts as common area is defined in the master deed, and it varies more than buyers expect — in some associations the windows and the heating system in your unit are common, in others they are yours.

Two buildings with identical fees can be in completely different financial positions. One may be funding reserves properly; the other may be keeping the fee artificially low and deferring the roof. The low fee is the more expensive building.

Why do reserves matter more than the monthly fee?

Reserves are the association's savings for capital replacement — roof, siding, elevator, boiler, parking deck. These items have known lifespans and known replacement costs. If the association has not been funding them, the money has to come from somewhere when the roof fails, and that somewhere is a special assessment: a one-time charge to every owner, which can run to five figures per unit.

A well-run association has a current reserve study — a professional projection of what needs replacing, when, and what it will cost — and a funding plan that matches it. Ask for it. An association that does not have one, or has not updated it in a decade, is telling you something.

Small associations converted from two- and three-family houses deserve particular scrutiny. With three units, there is no economy of scale and no cushion: a $30,000 roof is $10,000 each. These conversions are common throughout Greater Boston, and in some towns they are most of the condo inventory.

What is a 6(d) certificate?

Under M.G.L. c.183A §6(d), a unit cannot be conveyed free of the association's lien for unpaid common expenses without a certificate from the trustees stating what, if anything, is owed. In practice the seller's attorney orders it and it is delivered at or before closing.

It is a small document with a large function: it is the mechanism that stops a buyer inheriting the previous owner's arrears. If the certificate shows an outstanding balance, that balance is settled at closing out of the seller's proceeds. Confirm it has been ordered early — a missing 6(d) certificate is a routine cause of a closing being pushed.

What documents should I read before buying?

Ask for all of these, and actually read them:

• Master deed — defines the units, the common areas, and each unit's percentage interest.
• Declaration of trust and bylaws — how the association is governed and what the trustees can decide without a vote.
• Rules and regulations — the day-to-day restrictions: pets, rentals, renovations, parking, quiet hours.
• Budget and the last two years of financial statements — where the money goes, and whether the association runs a surplus or a deficit.
• Reserve balance and reserve study — the single most predictive document in the stack.
• Minutes of trustee and owner meetings, last 12–24 months — where you find the disputes, the leaks, and the assessments being discussed but not yet voted.
• Master insurance certificate — and confirm what it does not cover, which is what your own HO-6 policy has to.
• Any pending or threatened litigation — which can make the building unfinanceable.

Which restrictions catch people out?

Rental caps are the most common surprise. Many associations limit the number of units that may be rented at one time, and some require an owner to occupy for a period before renting at all. If any part of your plan involves renting the unit — now or in ten years — read this clause before you write the offer, not after.

Renovation approval is the second. Anything touching a common element, which frequently includes plumbing and windows, generally needs trustee consent. Pet restrictions, weight limits, and short-term-rental bans round out the list.

Does the building affect my mortgage?

Yes, and this surprises buyers late in the process. Conventional and FHA lending both apply project-level standards: the ratio of owner-occupied to investor units, the share of units delinquent on fees, whether any single owner controls too many units, whether reserves meet a minimum contribution, and whether there is litigation. A unit can be perfectly financeable while the building is not.

If you are financing, have your lender review the association questionnaire early. Finding out at the appraisal stage that the building fails a project standard costs you the deal and the deposit timeline.

What to take away

Judge the association, not the fee. A higher fee with funded reserves, current documents and boring minutes is a cheaper building to own than a low fee with a twenty-year-old roof and a trustee dispute in the minutes.

For how condominium living compares with the alternatives in this market, see the Greater Boston condominium guide. If you are weighing a condo against a small multi-family, the multi-family investment guide covers the other side.