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