There are several unique aspects to condominium ownership
that few people understand prior to buying a condominium
unit. Before you buy a condominium, you should do your
homework.
There are many benefits to condominium ownership. In the
case of most condominium developments, there are no outside
maintenance obligations to be performed by the unit owner.
Gone are the worries of plowing the driveway, shoveling the
walkway and mowing the lawn. Many developments offer added
facility benefits such as recreational areas, a pool, tennis courts,
meeting areas and the like.
There are some drawbacks to condominium ownership. Most
decisions are made by the majority of unit owners and may not
be in keeping with your personal choices. People who enjoy
working in the garden may find themselves without a yard, and
with very little privacy. Limitations on the use of your unit may
restrict the use of your unit in a way that you find unacceptable
(such as no pets or no holiday decorations rules).
Finally, you must pay a monthly condominium fee in addition
to your mortgage loan, and lenders take the monthly association
fee into account when calculating how much a buyer can
afford. These fees are typically established by the trustees of the
condominium owner’s association, and can escalate as facilities
age and maintenance costs increase.
Condominium ownership is often misunderstood. A
condominium is not a style of home; it is a manner in which one
owns property. When you purchase a condominium unit, you
typically purchase the area that is contained within the walls of
your unit (as specifically described in the master deed), plus an
undivided percentage of all the public or common areas of the
condominium development. Common areas are also set forth
in the master deed and usually include the roof, the building
exterior, sidewalks, driveways, yards, any amenities such as a
pool, gym, playground, tennis courts, walking trails, community
buildings, etc. A potential purchaser should determine what
percentage interest his or her unit has in the common areas and
facilities of the condominium, as the unit owner is responsible
for paying that percentage share of the entire cost of maintaining
the common areas of the condominium.
Here are some simple tips to consider before buying a
condominium unit:
- Look at the amenities of the development. Your monthly
condominium fee pays for those amenities, so be sure that
they appeal to you. - Consider the homeowners’ association dues. Ask to see the
financial records of the condominium, including budgets for
the last three (3) years. Determine whether there are sufficient
reserves allocated for future repairs. Check for special
assessments or expenses that the condominium has incurred
for projects or repairs that were not budgeted for. This
information should be reviewed to assess the financial stability
of the association. - If possible, review the minutes of the board and unit owner
meetings. This information can provide a brief history of the
association, as well as a window into the types of problems
facing the association. - Inquire into litigation issues such as pending cases against
the Board of Trustees, cases against the developer, rules
enforcement issues and collection actions against unit owners
for unpaid common fees. - Review the recorded condominium documents, which
typically include the master deed, declaration of trust,
bylaws of the unit owners’ association and any rules and
regulations governing the activities of unit owners and their
guests. Oftentimes, the rules and regulations restrict pets,
the presence of overnight guests, parking (even in your own
driveway) and the rental of units. It’s important to determine
in advance whether they are acceptable to your lifestyle. - Be aware of what is covered by the homeowners’ association’s
master policy of insurance. You’ll want to understand what is
covered by the homeowners’ association, and what you will be
responsible for. There are issues of coverage and deductibles
that can catch many unit owners by surprise. - Review the condition of the facilities, not just of the unit that
you are purchasing. Will a major repair, such as a new roof, be
necessary soon? Does the association have sufficient reserves
to pay for the repairs? - Talk to owners in the complex or building. Find out what their experience has been. Get a feel for the environment you’ll be moving into. If possible, meet your immediate neighbors. The nicest unit in the world is no bargain if you have awful neighbors.
Prior to signing a purchase and sale agreement, a buyer
should insist on being supplied with a copy of the master
deed, declaration of trust, rules and regulations (which
sometimes are subsumed within the declaration of trust), the
current common area budget and master insurance policy.
Armed with this information, we can assist you with your
condominium purchase, help you navigate through the pitfalls
and ensure that there are no unpleasant surprises. Let Fletcher
Tilton help you to make the buying process a smooth one.
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attorney-client relationship. Whether you are a new or
existing client, we’ll be quick to respond to your needs with
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