5 years ago

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What's the difference between common charges and maintenance in New York City real estate? We will demystify this topic in the following video. My name is Nick at Hauseit. We are the largest Buyer Agent Commission Rebate company and FSBO platform here in New York City. So, let's get started.

Common charges and maintenance are two terms which in theory can be used interchangeably. However, in New York City real estate common charges are usually mentioned when referring to a condo and the word maintenance is usually mentioned when referring to a co-op.

So, a condominium in New York City has two separate monthly payments: one of course is your common charges which goes towards the upkeep of the building and the second payment is your property tax bill and as an individual owner of a condo in the city you would pay this amount directly to the New York City Department of Finance on a quarterly basis. Property taxes might be included as part of your mortgage payment if your lender does what's called an escrow, and the escrow would essentially be a little account that they manage on your behalf and you pay into on a monthly basis enough money to cover the property taxes and your homeowners insurance and thereafter the bank would actually pay these amounts on your behalf. So, escrow is quite common but the big picture here is that again as a condo you're going to pay your mortgage, you're going to pay your common charges and you're going to pay your property taxes directly.

With a co-op on the other hand, the owners also known as shareholders make only one payment per month outside of their mortgage payment and that is called the monthly maintenance. Monthly maintenance for co-ops is generally higher than common charges for condos and the reason is that as a co-op owner your monthly maintenance includes your pro rata share of real estate taxes. The difference is that the cooperative corporation which owns the building is the one that actually makes these payments directly to New York City on your behalf. So, definitely don't want to be fooled here common charges versus maintenance they cannot be compared directly because with the co-op the maintenance includes property taxes and with a condo the common charges do not include property taxes so the best way to analyze and compare the carrying costs for a condo versus a co-op is really to add up the condo common charges and property taxes and compare that to the maintenance figure for the co-op.

Now keep in mind that it is still technically legitimate to refer to the common charges of a condo as maintenance. So, in essence you'll want to use maintenance when referring to a co-op and common charges when referring to a condo, but don't be surprised that people use the words interchangeably and just remember the main difference is that the co-op has that one payment a month whereas with the condo you're making two payments. Of course, in addition to you mortgage if you are financing.

We hope you found this video helpful. My name is Nick at Hauseit. Visit our website at https://www.hauseit.com to learn about ways to save money when buying real estate here in New York City. Thank you so much and we'll see you on the next one.

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/
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