What You Don't Know About Condo Complexes Can Hurt You

I saw that building in Warwick on the news, pretty awful. On the lending side we do a lot of digging into the financials to discover any pending assessments as well as check the master and unit policies, but I also reccomend they speak to someone that lives there to get a feel for how the place is run.

Hi Ginny, this is very important when buying a condo.  I am the homeowners president of my condo building and know all too well the problems that can arise.  We really need to make sure we and our clients are aware of what we are buying.  Thanks for that reminder!

There is so much boiler plate and fine print in the condo docs that it is very difficult to sort out the good info from the vast volume of the rest of it. Most docs are copied from a common source and so they look pretty much the same wherever they appear.

I believe most buyers do not really read and understand those docs; they just buy on faith that things will be OK in the future.

Only in hindsight do buyers find out what the weaknesses are. Like in  a stock prospectus, if buyers really understood what the docs are explaining and warning about, there might be very few buyers.

Protect yourself buy using certified home inspection service. 

Takes the potential liability off your back. TDS forms are required.

We have a lot of duties and none of them are a crap shoot. I don't gamble on other peoples money or a legal contracts.

There are ups and downs to condo ownership.  I had a condo and it was nice, and I must say I was closer (in a good way) to my neighbors there than anywhere else I have lived.  But there are also problems.  Be sure you understand where the Association policy leaves off and your Condo Coverage should begin.  Get caught up in HOA litigation with the builder can be a big problem too.

It's important for Buyers to know and understand the financial situation of the complex, how much reserves, dues delinquencies etc. I have an investor client who loved condos (when they were cheaper) and I was amazed how poorly many complexes are managed. If they don't have adequate reserves the upkeep will deteriorate, or they could have a large special assessment pop up.

Ginny this is a smart topic for condo buyers. One thing I add is examine the financials of the HOA. See how well funded the reserves are and look at the minutes for future projects that are big ticket items. Costs can change and that's important.

Good morning Ginny. Your title says it all. This is a terrific post and dealing with the results of ice damming in my home now, it is important to check it all out.

All Buyers looking at condos need to have a heart to heart discussion about condos.  There are pluses and minuses. Last year a Buyer purchased a condo in a development that had  a pending HOA lawsuit.  The Seller and listing agent were not aware of the lawsuit.  Due to the pending suit and unknown outcome, lenders would not lend money to Buyers purchasing in the complex. Both Sellers and Buyers suffered and property values decreased. My Buyer went through three lenders and paid for two appraisals before finding a lender who would fund a loan to purchase a property in the community.

Hi, I can't believe I missed this post, great read on todays hot topic. Thanks for sharing.

That is really interesting. I never thought about that question. Thanks.

Sunny greetings from Fort Lauderdale, FLorida

The due diligence on the condominium financial statement and budgets is always a huge part of the buying process.  Getting an idea about assessments, future capital improvement projects, monthly increases is definitely a big aspect of educating yourself before you sign a contract.

Oh yes, some good watchouts here.  A good realtor can come in handy here.

Good Sunday morning Ginny Gorman -

You have certainly shared some very valuable real estate information.  I was thinking as I read this one deserves the golden star then looked and you had it.  Congrats!

Good morning Ginny. Scary post but oh so important. Your insights are significant and make me think this should be a handout to all condo buyers. 

Great post, Ginny Gorman !  I saw it as a reblog by Debbie Reynolds .  As I told her, I am currently in the market for the condo and this post has given me more to consider during my due diligence.  

Ginny, saw this posted as a reblog on Debbie Reynolds blog. It is an excellent and informative post for all condo buyers.

Ginny,

Thank you for this great post about condos.  Lots of great information.