The 5 Key things to know about condo ownership
When it comes to home ownership, not all properties are the same. While purchasing a single family home is relatively straightforward, buying a condo comes with a unique set of challenges. From understanding the type of ownership, to the rules and regulations of the condo association, before going under contract, make sure you are in the know about the type of purchase you are making.
5 things to understand about buying a condo
- Understand the Type of Ownership: A good starting point is to determine type of ownership of the property. For most condo buildings each unit has separate and distinct ownership, with joint ownership of the common areas. Oftentimes the joint areas are subject to maintenance, which can lead to management fees. Understand your obligation to the rest of the complex before moving forward.
- Condo Associations. Whether the complex has a single president or an entire board, it’s not uncommon for the homeowners to have an association to make decisions on behalf of the collective. In some cases, an outside management company will be brought in to run the day to day maintenance. Get a feel for how the homeowner’s rights are represented early on in the negotiation process.
- Rules and Regulations. Condo boards and associations implement rules and regulations outlining the homeowner guidelines to draw a line around what the association controls, from allowance of pets in the units, patio furniture usage, to the boundaries of parking spaces. These rules and regulations can even determine what improvements you can make within your four walls. Ask to see a copy of the bylaws so you aren’t caught off guard, especially if you have your sights set on a renovation project.
- Dues and Assessments. It’s typical for condo owners to contribute to the maintenance fees by way of monthly dues and assessments. Those fees can vary from $50 to several hundred dollars depending on the building amenities. For example, a luxury highrise building with a gym and a swimming pool would have a much higher fee than a three-flat building. Find out how the monthly dues are going to impact your financial obligation.
- Financial Health. When you purchase a condo you have just as much room to evaluate the association’s financial health as your lender does you when securing your mortgage. Make note of when the last special assessment was made, and how much the association has in reserve. If there is little reserve, it might be the case of poor financial health within the property. This might also be a sign of some unforeseen expenses coming your way in the future, like a roof replacement project. An association with a strong reserve, means they are prepared for any unexpected issues to be handled, and you can feel more confident that there is nothing hiding behind closed doors.
Failing to understand and investigate the unique pieces of the condo purchasing puzzle is a big mistake, but it’s not always obvious when you go through the process. Make sure you are protected when making such a large purchasing decision. Talk to one of our real estate attorneys at Anselmo Lindberg & Associates, we have experts with years of experience that can guarantee all your bases are covered. Contact us for more information.