Staring at HOA dues on a downtown condo and wondering where that money goes? You are not alone. If you are eyeing a high-rise in LoDo or the Central Business District, understanding fees, reserves, and assessments will help you buy with confidence. In this guide, you will learn what HOA fees typically cover, how to read a building’s financial health, how dues impact your loan and resale, and the key questions to ask in Denver. Let’s dive in.
What HOA fees cover
Core operating costs
Most downtown buildings use dues to fund the basics that keep the property running. This includes on-site management or a concierge, janitorial services, and routine maintenance for lobbies, hallways, elevators, and shared HVAC systems. Dues also cover utilities for common areas, trash and recycling at collection points, and contracts for elevator service, fire and alarm monitoring, pest control, and security systems.
Amenities and services
Amenities add value but also raise operating costs. Fitness centers, pools or spas, roof decks, clubrooms, business centers, guest suites, and package rooms all require staffing and upkeep. Parking and storage can be included in dues or billed separately, and some buildings offer valet or in-house maintenance. A few associations buy bulk cable or internet and include it in dues.
Utilities included vs. not included
Every HOA is different. Many include water, sewer, and trash, while electricity, gas, and in-unit internet are often separate owner expenses. If there is a bulk cable or internet plan, find out if it is mandatory or if you can opt out.
Insurance and administration
Your dues fund the association’s master insurance for common elements and often the building exterior. You still need your own HO-6 policy for interior finishes and personal property. Dues also pay for management fees, accounting, legal, board meeting costs, and routine reserve contributions.
Reserves and assessments
Why reserves matter
Reserves are savings for big-ticket items like roofs, façades, elevators, shared HVAC, and parking garage repairs. A current, professional reserve study estimates useful life and replacement costs so the HOA can plan ahead. Very low reserves or no recent study is a warning sign.
When special assessments happen
If reserves and operating funds cannot cover a major repair or urgent project, the HOA may levy a special assessment. This can be a lump sum or an extra monthly charge over time. Ask about the building’s assessment history and any planned capital projects.
Signs of strong financial health
Look for a healthy reserve balance relative to the reserve study, realistic budgets, and clear plans to address deferred maintenance. A low delinquency rate, appropriate insurance coverage, and transparent meeting minutes are also good signs. Frequent or large assessments and vague financials are red flags.
Dues, loans, and resale
Underwriting and DTI
Lenders count your monthly HOA dues when calculating your debt-to-income ratio. Higher dues can lower the mortgage amount you qualify for. Lenders also review any disclosed pending assessments, which can affect approval.
Condo project approval
Many loan programs follow agency guidelines for condo projects. Buildings with high rental percentages, significant commercial space, or active litigation can face approval challenges. If a project is not approved for a program you plan to use, you may need a different loan type or a larger down payment.
Resale impacts
Higher dues can narrow your buyer pool, but well-run buildings with strong reserves and solid services often justify the cost. Rules around rentals can shape investor interest and financing options. Insufficient insurance, major deferred maintenance, or litigation can limit lending and put pressure on pricing.
What to request and compare
Must-have documents
Gather the full due-diligence packet early so you have time to review. Ask for:
- Current HOA budget and prior year financials
- Reserve study or a reserve summary
- Meeting minutes from the last 6–12 months
- Bylaws, CC&Rs, rules, and any amendments
- Certificate of insurance / master policy summary
- Resale certificate or disclosure packet
- Delinquency report or collection policy
- List of any pending assessments and capital projects
- Evidence of condo project approvals if you need a specific loan program
Key questions to ask
- What exactly is included in monthly dues (utilities, hot water, cable, parking)?
- Is parking deeded, assigned, or leased? Any waitlists for parking or storage?
- When was the last reserve study? What percent of recommended reserves is funded?
- Any special assessments in the past 5–10 years? Any planned now?
- What is the current delinquency rate and the collection policy?
- Any ongoing or threatened lawsuits?
- What are rental and short-term rental rules?
- How often do dues increase, and by how much?
Red flags to avoid
- No recent reserve study or very low reserves
- High or increasing delinquencies
- Frequent special assessments or unpredictable fee hikes
- Significant litigation or repeated vendor turnover on core systems
- Insurance gaps that shift costs to owners
Denver factors that shape costs
Building age and type
Older mid-century towers may face façade, window, and mechanical updates that drive capital needs. Newer luxury buildings often include more amenities, which raises staffing and operating costs.
Climate and maintenance
Denver’s freeze–thaw cycles and snow make de-icing, snow removal, and building envelope care recurring expenses. Structured parking requires ongoing upkeep, including concrete repair and drainage.
Parking realities
Land is tight downtown, and parking is valuable. Some units include deeded spaces in dues, while others use separate fees or leases. Parking arrangements affect monthly costs and resale.
City codes and upgrades
Code or safety upgrades can create capital projects for HOAs. Ask whether the board is tracking known municipal requirements and planning for them in the reserves.
Practical buyer checklist
- Compare what each building includes in dues, line by line.
- Review the latest budget, reserve study, minutes, and master insurance.
- Ask about assessment history and any planned capital projects.
- Confirm how parking and storage are owned, assigned, or leased.
- Check rental rules if you plan to rent now or in the future.
- Talk to your lender about how dues and any assessments affect approval.
- Weigh higher dues with strong services and reserves against lower dues with fewer amenities and possible future costs.
Final thoughts and next steps
When you understand the story behind a building’s dues, you make a smarter buy. Focus on what fees cover, whether reserves match future needs, and how the project’s status affects your financing and resale. If you want a clear, side-by-side review of your top buildings in LoDo or the CBD, our team can help you compare documents, spot risks, and align the choice with your goals. Reach out to schedule a downtown condo consult with Hector Murguia.
FAQs
Do HOA dues in Downtown Denver include utilities?
- It varies by building. Many include water, sewer, and trash, while electricity, gas, and in-unit internet are often separate.
What is a condo reserve study and why does it matter?
- A reserve study estimates the timing and cost of major repairs so the HOA can save appropriately and reduce the risk of special assessments.
How do HOA dues affect my mortgage approval?
- Lenders count dues in your monthly obligations for debt-to-income, which can reduce the loan amount you qualify for.
What happens if there is a pending special assessment?
- It must be disclosed in resale documents, and lenders factor it into underwriting. Ask how it will be billed and whether it transfers at closing.
Are HOA dues tax deductible for my downtown condo?
- Typically not for a primary residence. Deductions can apply for rentals or certain home office situations; consult a tax professional.
