10 Questions to Ask Your Condo Board
Before
you buy, contact the condo board with the following questions. In the process,
you�ll learn how responsive�and organized�its members are.
- What percentage of units is owner-occupied? What
percentage is tenant-occupied? Generally, the higher the percentage of
owner-occupied units, the more marketable the units will be at resale.
- What covenants, bylaws, and restrictions govern the
property? What grandfather clauses are in place? You may find, for instance,
that those who buy a property after a certain date can�t rent out their units,
but buyers who bought earlier can. Ask for a copy of the bylaws to determine if
you can live within them. And have an attorney review property docs, including the
master deed, for you.
- How much does the association keep in reserve? How is
that money being invested?
- Are association assessments keeping pace with the
annual rate of inflation? Smart boards raise assessments a certain percentage
each year to build reserves to fund future repairs.To determine if the
assessment is reasonable, compare the rate to others in the area.
- What does and doesn�t the assessment cover�common area
maintenance,
recreational facilities, trash collection, snow removal?
- What special assessments have been mandated in the
past five years? How much was each owner responsible for? Some special
assessments are unavoidable. But repeated, expensive assessments could be a red
flag about the condition of the building or the board�s fiscal policy.
- How much turnover occurs in the building?
- Is the project in litigation? If the builders or
homeowners are involved in a lawsuit, reserves can be depleted quickly.
- Is the developer reputable? Find out what other projects
the developer has built and visit one if you can. Ask residents about their
perceptions. Request an engineer�s report for developments that have been
reconverted from other uses to determine what shape the building is in. If the
roof, windows, and bricks aren�t in good repair, they become your problem once
you buy.
- Are multiple associations
involved in the property? In very large developments, umbrella associations, as
well as the smaller association into which you�re buying, may require separate
assessments.