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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.
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. |
