For many home shoppers, purchasing a condo makes more sense than buying a house. The maintenance and upkeep of owning your own home just doesn’t make sense for all buyers, but a condo still allows you to own your property rather than renting. That said, with the purchase of a condo, you are also buying into a new relationship with the condo association. Not all condo associations are the same, and that’s why we’ve put together our top three tips for shoppers looking to buy a condo.
1. Look at the Association Budget
Are there adequate reserves being set aside for future major repairs and maintenance? If the association isn’t saving up for future repairs, then what typically happens is that owners are hit with “special assessments” which can range from a few thousand dollars to tens of thousands of dollars or even more. If you and your real estate agent aren’t equipped to flesh out the budget and reserves, we recommend talking to someone who does, like an accountant.
2. Find out the last time the association levied a special assessment and/or completed a major repair/renovation project.
The main question you’ll be asking here is “How much was the project, and how was it paid?” If the answer comes back that there has never been a major repair or renovation and the structure/siding/roof etc. is decades old, that is not a good sign.
3. Read the bylaws of the homeowners association, and obtain the minutes from last four board meetings
What issues are being talked about? Is there controversy, especially regarding repairs or maintenance? Is there anything you want to do with your property that’s prohibited in the bylaws? For instance, if you’re an owner occupant of your condo unit, you probably don’t want any rentals, but if you’re buying in a vacation destination, you may very well want the ability to rent your unit. This is where you will need to be positive of all bylaws before moving forward with your plans.
As always, doing a bit of homework up front can really save you either by avoiding big problems altogether or at least making sure you are getting in on a good thing – in this case, a solid condo association.