1.
What is a condo? It’s a separately owned space whose interior
surfaces serve as the boundaries. You
will also own a share of the common area of parking lots, hallways, clubhouse,
lawn, etc.
2.
Be sure to check
out the Declarations, By Laws, Rules and Regulations. These are the documents that created the
condominium, they cover things like your voting rights, owner’s
responsibilities, restrictions, etc. The
rules may restrict things like charcoal grills on the decks, short term rentals
or pets. The condo documents should also answer questions like; who maintains
the deck.
3.
Association dues
are usually due monthly. What the dues
include depends upon the association.
They may include water, sewer, cable TV, gas heat, building maintenance,
trash dumpster, insurance on the building, snow removal and management services. Dues vary by complex, if the association has
pools, hot tubs, elevators, etc to maintain they will be higher. Even if the dues include the building
insurance you will want to get insurance to cover the interior of your condo.
4.
The association
budget is another item to be sure to review.
The association should be collecting enough to pay the bills plus
setting aside money for repairs and improvements that will need to be done in
the future. Items like boilers and roofs should have a plan for repair.
5.
Read the minutes
for the annual condominium association meeting and board meetings. Those will tell you what is concerning
owners, the future upgrades and improvements.
If they are thinking about an assessment or if enough money is in the
reserves.
6.
Speaking of
assessments; as the complexes get older more repairs need to be made. Updating of the common areas may be necessary
to keep up the property (and the values too).
By reading the minutes and talking to board members you should have an
idea if an assessment is due in the near future.
7.
Some association
documents have a first right of refusal.
It was more common back in the 1960s and is rare in a newer
complex. What it usually entails, is
after the buyer has an accepted offer, a letter goes out to the owners in the
complex with the price and terms. One of
those owners could take up the first right of refusal (at the great price you
negotiated) and you are out of luck.
Some associations are changing their By Laws to remove the first right
of refusal because it makes getting a loan on the property more difficult.
8.
What amenities
does the complex have? A pool, hot tub,
game room, tennis courts, elevator, etc might be something you would like, but
they also increase the constant upkeep of the complex.
9.
When not using
the condo yourself are you going to rent it out? The association may have restrictions on
certain types of rentals. Some do not allow
short term rentals.
10. Financing can be a challenge depending on the
complex. Figure you will have to put at
least 20 to 25 % down for a new loan. If
the complex has a front desk, time shares and/or commercial space on the ground
floor you may have to go to a “portfolio lender” where you may need more down and have a
higher interest rate.
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