WHAT NEW HAMPSHIRE BUYERS SHOULD KNOW BEFORE THEY PURCHASE A CONDOMINIUM

BUYER ALERT - Read this BEFORE purchasing a Condominium.

       A Condominium is a type of joint ownership of real estate.  There are a lot of things you need to know before you decide if a Condominium is right for you.

     Typically, the Buyer owns and is responsible for everything within the walls of the condominium unit and a percentage of all the public or common areas according to a formula set forth in the documents recorded in the registry of deeds. This means the buyer has an ownership interest in the unit, and also becomes an owner of an undivided interest in the common areas.  The common areas or limited common areas may include the roof, the building siding, roads, sidewalks, and public facilities. The public facilities may include a pool, clubhouse, playground, tennis courts, golf course, etc...

           Documents the Buyer should review:

            It is important to obtain and review various documents in order to determine if you want to purchase a condominium.   If you cannot review the documents and obtain necessary information prior to making an offer, make sure that the offer contains a contingency which provides sufficient time for you to review documents and information and gives you the ability to cancel the contract and obtain return of your deposit if the information is unacceptable.

            The New Hampshire Laws provide that certain notices and documents be made available to the Buyer as set forth in RSA 477:4-f (Notice from Seller to Buyer) and REA 356-B:58 (Request from Buyer). 

1. A recordable statement setting forth the amount of unpaid assessments currently levied against the unit.
2. A statement of any capital expenditures and major maintenance expenditures anticipated by the unit owners' association within the current or succeeding 2 fiscal years.
3. A statement of the status and amount of any reserve for the major maintenance or replacement fund and any portion of such fund earmarked for any specified project by the board of directors.
4. A copy of the income statement and balance sheet of the unit owners' association for the last fiscal year for which such statement is available.
5. A statement of the status of any pending suits or judgments in which the unit owners' association is a party defendant.
6. A statement setting forth what insurance coverage is provided for all unit owners by the unit owners' association and what additional insurance coverage would normally be secured by each individual unit owner.
7. A statement that any improvements or alterations made to the unit, or the limited common areas assigned thereto, by the prior unit owner are not known to be in violation of the condominium instruments. 
8. A copy of the condominium declaration, by-laws, and any formal rules of the association.  [And all amendments]
9. A statement of the amount of monthly and annual fees, and any special assessments made within the last 3 years.

 Additional documents and information.  

• NH Condominium Rider - This is Part of the Sellers Property Information Report which you should obtain and make sure is filled out completely.
• Minutes of meetings of the Board of Directors and the Association Members meetings - for at least the past 3 years.
• Talk to the Property Manager and/or officers of the Association.
• Visit the Project and talk with people who currently live there. Or if not possible, then write or call current owners to ask about their experience.
• Find out about any anticipated actions that have not been voted on - e.g., reserve accounts, special assessments or anticipated litigation. 

Check on any Lender Requirements.

            The lender may have requirements and it is important to know what type of financing you will be obtaining and what the lender may require. Below are some typical lender requirements.

• The lender may require that a certain percentage of the units be owner-occupied rather than rented.  The percentage of units that must be owner occupied may vary depending on the type of loan program and your credit history.
• A buyer who is getting an FHA or VA insured mortgage needs to find out if the condominium complex is FHA or VA approved or if the lender can get a "spot approval."
• A buyer should be aware that the lending institution will take the monthly condominium fee into account as an expense to the buyer when determining how much the buyer can afford. Typically, the condominium fee cannot be deducted on your taxes when the condominium is your principal residence.

There are Pros and Cons to Condominium Ownership.

PROS:

• Condominiums may be more environmentally friendly - greater density of people per acre-shared amenities.  See my blog new urbanism.
• No outside maintenance concerns
• Neighbors are close by and may provide security
• Facilities may include recreational areas, pool, gym etc. which one could not otherwise afford
• Often a newer than a single family home in the same price range
• Generally less expensive than a single family home

CONS:

• Decisions are made by the majority of the owners
• Lack of privacy
• Small yard or no personal yard
• Monthly Condominium fee
• Pets may not be allowed or restrictions on the number and breed of pet
• Neighbors may be noisy
• Reserves may not be adequate for future maintenance, repairs, replacement
• Board may operate in a fashion which is not to your liking - or be self-managed rather than professionally managed
• Restrictions may be put on architectural changes to the unit

Retain the Services of a Buyer Agent to represent you.

            Buying a condominium requires due diligence on the Buyer's part.  Be sure you have an Exclusive Buyer Agent representing you before you begin your search for a condominium.  If you would like more information, please email me at nhbuyerrep@gmail.com or call Joan at 603-881-3800 x 2 and I will be happy to answer any questions you may have.

copyright 2007 Joan Whitebook ~ All rights reserved