From my long observation of the Rancho Cucamonga condo market, management fees used to mainly cover landscaping and exterior maintenance, but now, with more complexes including pools, gyms, and gate security, the composition of management fees has changed. As the number of facilities increases, management fees have also clearly risen.

The monthly HOA fees for local condo complexes generally range from $235 to $380. For specific complexes, La Paloma is around $285 per month, Huntington Villas is about $220, and the county's overall median is $335. Basic complexes that only include landscaping management tend to be on the lower end, while those with pools, gyms, and security access have higher management fees.

Rancho Cucamonga has seen many planned communities developed over the last twenty years alongside the growth of the Inland Empire region. Unlike older coastal cities with dense buildings, most complexes are relatively new, but the initially low management fees are often adjusted to more realistic levels over time. Judging solely by the initial management fees can lead to unexpected burdens from future increases.

In complexes with many shared facilities, the number of management staff and maintenance contracts also increases. With various contracts for pool maintenance, landscaping, and security gate upkeep, examining how much each of these items contributes to the HOA budget can help gauge how management fees might change in the future.

In the past, it was often assumed that new complexes had lower management fee burdens, but now, as more complexes reach 10 to 15 years post-construction, it has become more important to check the history of reserve fund contributions. From my perspective, I would advise looking at how management fees have accumulated rather than just the numbers. During loan assessments, the HOA budget and reserve fund balance, as well as the percentage of delinquent units, are also reviewed, so one should not skip financial document checks just because a complex is new.

Management fees typically include building exterior maintenance, master insurance, shared facility management, landscaping, trash collection, and reserve fund contributions. The more facilities a complex has, the more equipment and structures need to be accounted for in the reserve fund. Items like pool filtration systems, gym equipment, and security gate devices will eventually require replacement or major repairs. If these items are not adequately reflected in the reserve study, it could lead to special assessments.

California's Civil Code 5550 mandates that HOAs conduct a reserve study at least every three years, and under SB 326, established after the Surfside condo collapse in 2021, buildings with three or more stories must inspect exterior elevated elements like balconies and decks every nine years. The first inspection deadline was January 1, 2025. It is important to keep in mind that complexes with many facilities will have more items to inspect.

The order of checks should be as follows:

• List of shared facilities and their condition
• Trends in reserve study changes over the last three years
• History of special assessments
• Rules regarding rentals and pets

Complexes that manage shared facilities in-house differ in management fee structures from those that outsource to external companies. Complexes with a high outsourcing ratio may see larger adjustments in management fees each year due to labor cost fluctuations, so reviewing the management fee increase rates over recent years can also be helpful.

Having many facilities is not always a good choice, nor is having low management fees always a safe choice. Evaluating the facilities, management fees, and the status of the reserve fund together can be beneficial in practice. This article does not constitute investment or legal advice, and consulting with a professional before making any actual contracts is recommended.