Housing cooperatives are membership-based legal entities that own one or more residential buildings. Unlike condominiums and single-family homes, co-ops are not owned outright as real property. Instead, buyers purchase shares within the co-op association and receive exclusive use of a specific unit.

Co-op living comes with its own set of peculiarities, among them being maintenance fees. In very simple terms, co-ops charge maintenance fees to cover the co-op association’s expenses for the property. In most cases, the larger an owner’s unit is, the more shares they will own within the corporation, and the higher maintenance fees will be.

What is covered by maintenance fees

The monthly maintenance fees in a co-op cover building expenses like heating, cooling, electric, and other utilities. Maintenance fees also cover insurance and staff salaries.

Unlike the common charges a condo owner pays, co-op maintenance fees also cover taxes. Since co-op buyers don’t get tax bills for their specific unit, rather the entire building is issued a single tax bill, taxes are paid by the corporation, split between owners, and included in maintenance fees.

If there is a mortgage on the building, then the maintenance fees will also include mortgage costs. This also means that if a shareholder does not stay up to date with their maintenance fees, other co-op members may be forced to cover the default. However, the rigorous interview and approval process conducted by co-op boards usually keep default at a minimum. Read more about how to get the co-op boards’ approval here.

What may be covered by maintenance fees

Depending on the property, maintenance fees could cover a wide range of other common costs, including:

  • Heat
  • Pest control
  • Electric
  • Plants, flowers, and landscaping in common areas
  • Decorations
  • Gas
  • Hot water
  • Bike room
  • Trash
  • Snow removal
  • Plumbing
  • Storage room
  • Parking

The co-op board ultimately decides what is covered by maintenance fees and what owners must pay themselves.

Maintenance fees are dependent on the number of shares an owner has

The cost of each owner’s maintenance fees depends on how many shares they hold in the corporation. Since the number of shares owned is related to the size of the unit, the larger the unit, the more the owner will pay in maintenance. However, this usually also mean more votes on the condo board, unless the co-op follows the Rochdale Principles, in which case every shareholder gets only one vote, regardless of the number of shares they hold.

Maintenance fees change over time

The specific way in which maintenance fees change will vary based on the bylaws of any particular co-op. In some cases, fees may fluctuate throughout the year. For example, if maintenance fees cover the cost of heating, they may be higher during winter than in the summer.

Maintenance fees can also rise to make up for ongoing or growing expenses, like the cost of higher salaries or to make up for pricier energy charges. Fees can also be raised temporarily to cover the cost of a large expense like replacing the building’s roof, for example.

For more information, read our full post on the pros and cons of co-op living.

Eliza Theiss

Eliza Theiss

Eliza Theiss is a senior writer reporting real estate trends in the US. Her work has been cited by CBS News, Curbed, The Los Angeles Times, and Forbes among others. With an academic background in journalism, Eliza has been covering real estate since 2012. Before joining PropertyShark, Eliza was an associate editor at Multi-Housing News and Commercial Property Executive. Eliza writes for both PropertyShark and CommercialEdge. Reach her at [email protected]

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