ABC's of Buying Florida Real Estate

 
 

 

 

Before You Buy A Condominium Unit

 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 much more in a face-to-face meeting than you can with a phone call, so try to make that happen," he says.

  Review the Association'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 sufficient to cover future costs.

  Ask what kind and how much insurance the association carries and what is covered, and more importantly, not covered ?

  Ask the property manager what the delinquency rate is on condo fees. If many people aren't paying their association fees in a timely fashion, something may be amiss and you want to know what that "something" is before you buy into that condo association.

  Does the property manager expect, or do the Board meeting minutes anticipate any "special assessments" in the near term. If so, you may be able to get the Seller to pay them in advance as part of your closing.

  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.

  How Talkented are the People Managing the Community?   You need to be wary of a condo association without a "professional" property manager.  Although many condominium developments run themselves using only members of the community as leaders, such an arrangement can lead to more hassles for owners. Condos managed by the residents, themselves, are subject to all the foibles of businesses essentially 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 Community Association Managers International Certification Board website  

If the complex is professionally managed, ask some of the residents (not the Seller) about their satisfaction with the property management firm. Ask several residents. Some people are chronic complainers and no property manager or Board could ever keep them happy at a monthly condo fee they'd be willing to pay.

  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 but keep in mind that condo associations can, usually by a majority or super-majority vote, change its rules and/or bylaws to prohibit or restrict rentals," according to Andree Huffine, a Sarasota real estate broker and condo owner. 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 in the future 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.




 

 
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