Before You Buy A Condo
Now that you think you've found exactly the right condominium property; one that meets your needs and desires and its priced right, what questions should you demand to have answered before you make the offer formal. These are, in my judgment, the most important things you need to understand before buying a condo.
Meet the Property Manager You can learn more in a face-to-face meeting, but even a phone conversation will give you a sense of how responsive and communicative the property manager is.
Review the Associations's Financials.of the Association and in particular, the balance in the Reserves fund.
This will give you an indication of whether the association fees have been kept at levels that create a slow build-up of reserve funds to cover replacing the roof, periodic work on the tennis courts or pools,
or repaving the parking lot. A small balance in the Reserve fund may be explainable (perhaps they just finished a major project), but it does deserve an explanation. Ask if the Reserve fund has been subjected to
a "reality check" in the past 5 years. If not, there's no way to judge whether the Reserves account is being kept at a level sufficent to cover future costs.
Review copies of the minutes of recent condo association board meetings. This will give you an indication of the kinds of issues and concerns, if any, that the board has been dealing with. It will give you some clues to what may be wrong with either the physical construction or any behavioral issues among the residents. Even if there are no issues or concerns, a review of the minutes will reveal the sorts of projects under way at the complex.
"Who's Watching the Store ?" You need to be wary of a condo association without a "professional" property manager.
Although many condos are run very well by residents, themselves, such an arrangement can lead to more hassles for owners.
Condos managed by the residents, themselves, are subject to all the foibles of businesses being run by "amateurs." That's worth thinking about.
There is a national certification board for Community Association Managers. You can learn more about the qualifications of a Certified Community Association Manager at The NBC CAM website
Review the Rules, Regulations and By-Laws. Many condo associations have abbreviated versions of their rules that will tell you, in summary fashion, things like whether or not you are allowed to have pets and how many? What restrictions, if any, are placed on pets and pet-owners ? You may not have a dog, but you may not appreciate it if your next-door neighbor has three dogs that bark day and night and you have no recourse. How about parking. Can your guests park on the premises ? For how long ? Build a list of concerns and then go looking for answers in the condo documents.
Are rentals permitted and, if so, what percentage of residents are renters. A condominium with a high percentage of renters as residents, in addition to other problems this may cause, may make it harder for you to resell the unit later on.
If you are planning to rent your unit, you need to understand the rental policies of the association. If the rental population is over about 10%, there should be clear rental policies in either the by laws or as an amendment. If rentals are allowed, are monthly rentals allowed or only 12 month leases. Ask other tenants about their rental experiences. Keep in mind, however, that condo associations can, usually by a majority or super-majority vote, change its rules and/or bylaws to prohibit or restrict rentals. The more owners who rent, the less chance that will happen.
In summary, you should check out your condominium association as carefully as you would any other major component
of a single-family home purchase. You can avoid a lot of grief downstream by fully understanding the situation while there's still time to
either decide not to make an offer or make adjustments in the amount of your offer to compensate for what you've learned.
Michael Saunders & Co.
330 John Ringling Blvd
Sarasota, FL 34236