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10 Questions to Ask the Condo Board |
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Tuesday, 03 April 2007 |
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Will you be buying a condominium? If so, it is a good idea to get a handle on the board that manages the property. These folks can have a key effect on your life there. Here are some good questions to get answered before you buy the property.
Before you buy, contact the condo board with the
following questions. In the process, you’ll learn how responsive — and
organized — its members are.
1. 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.
2. 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.
3. How much does the association keep in reserve? How is that money being invested?
4. 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.
5. What does and doesn’t the assessment cover—common area maintenance, recreational facilities, trash collection, snow removal?
6. 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.
7. How much turnover occurs in the building?
8. Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.
9. 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.
10. 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.
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