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SELLERS, ALWAYS READ THE CONDO OR ASSOCIATION RULES BEFORE SELLING

When a buyer purchases a condominium he or she is given a copy of the rules and bylaws and given up to ten days to review them. After reviewing the documents buyers can decide that they do not want to buy the condo.

We see all kinds of rules. I remember one where just about any number of pets were allowed but no birds. There was another where fish were the only type of pet allowed. In others I have seen rules about a rotation on who cleans the laundry room and the entryway, and who waters the plants.

Often buyers do not read these all important documents as throughly as they should. I usually go through them myself and point out areas that may cause concern.

Sellers often seem to be unaware of what is in the documents. Last year I listed a townhouse and the seller said that real estate signs were allowed. I ordered the sign, before I got a copy of the bylaws and had to cancel the order.

Recently I witnessed a situation where the owner of a condo sold the garage separately from the unit. The bylaws state that if there is a garage assigned to the unit it must be sold with the unit. The association has retained an attorney and are demanding that the owners of the garage give it to the owner of the condo. It is likely that they can legally do that. Condo associations can enforce the rules, and sometimes they do. They can even foreclose on a unit if the owner fails to pay dues of assessments.

Before selling a unit sellers should read the bylaws, so should their agent. Buyers should read every word before the end of the rescission period. They should also look at the financial statements. There are buildings that have no reserves and the association is responsible for exterior maintenace. Generally the way this is handled is each unit is assessed a share of the cost. Buyers need to make sure that they have the reserves.

There are maitenance, utility and insurance costs involved with every type of housing, home buyers need to have reserves. It is part of being a homeowner.

Also read association dues compare the dues to owning a home without an association, and the dues may seem low.

Posted by Dave Magua on 07/18/2007 03:16 PM

Comments (10)

sellers, weston florida, condo, homeowners, buyers

10 Comments on SELLERS, ALWAYS READ THE CONDO OR ASSOCIATION RULES BEFORE SELLING

JUL

2007

Great suggestions, Dave - so many problems come from not reading the docs - its not a bad idea to have the agents read them as well.

Dave

Great information here. Sounds like you know what you are talking about.

I have been bitten once, now I am twice shy. Now I read everything.

Regards

Dave

JUL

2007

Dave:

Are you finding the docs easy to get a hold of for buyers who have not yet made an offer and are only thinking about it?

I advise my trainees to "accompany" their buyers to the listing agents office for a "viewing" -- (prior to making that offer only to find out that TWEETY BIRD is not allowed, nor his little brothers)

or to recommend that their buyers have an attorney review the docs.

Change hats: As the listing agent, would it be a good idea to scan the docs to CD so that you could retain the original and not have to be concerned about their getting away from you or your seller? Those docs are expensive.

Some docs may be online somewhere . . .

I like the scanning idea (docs, FAQs, Articles of Inc., Last Financial - the whole nine yards), I just don't know what type of disclaimer or caveat should accompany the CD in case of a mis-scan (the scan-ster should double check the page numbers from the scan) . . . maybe I am too Type A . . . .

Karen Ross- EWM

Reading the docs is helpful, but rarely do we have the most recent information. Oftentimes Sellers don't keep up with amendments and don't want to spend the money to order the Resale Packet for us to look at so we can become knowledgeable. I try to be very clear that while this is the information I know about, it may not be the most recent, and if there is a critical issue that can't wait, such as whether a pet would be accepted, I take the time to contact the property management company and try to find out the answer.

Most real estate attorneys do NOT read all the Rules and Regulations or Bylaws, they focus on the financial documents and even then, most often they just skim through the financials. I encourage my buyers to take the time to read all the documents and ask their attorneys questions about the financials.

I have found that a lot of the better run managment companies have the docs and the most recent ammendments online. I then give this link to the buyer. This solves a lot of problems and saves a lot of time.

If it is not online, then as a listing agent I try to get the most up to date docs and scan them.

Then when a buyer or a buyers agent has need of them, I can pass them on.

Dave, I haven't seen a good property management firm yet, at least in my area. None of them will let me see the docs and one wouldn't even let me see recent sales so I could do a proper CMA for a co-op seller (some of the best sales in the co-op are private sales, not on MLS). My access to the documents has been through the owners who give me a copy of the documents, but they often do not have ALL the amendments.

There may be a liability issue in terms of you passing the papers on to a client as you may not have the latest version and that one last amendment that isn't in the papers you hand over could be the reason your client or the buyer's agent's client doesn't end up buying and then guess who could get sued for the cost of the wasted money on inspections and mortgage application? I have handed over the documents at times, but I know it's a risk and I stress that these are not the updated documents and those will be received in the resale packet.

Gail,

It is a difficult situation where we as agents should be the starting point for the buyers to start there due diligence period. The emphasis is on the "starting point".

A lot of the management companies get really weird though. Usually a strong letter from the seller and a couple of telephone calls seems to loosen there grip on the information that is needed to move forward with the transaction.

Regards

Dave

You know that each particular condo or HOA is unique, but it is too much changes from one to another one. Eventhought it is within the same city, we definitely need to get informed and read. Those days, they are changing and adding many things; for example: for renters, in some cases only filling applications, for others asking for a expensive deposit for common areas... it is really too much! The key again is getting informed.

JUL

2007

Thank you very much for sharing, that was good information.

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