Category

Condo Associations

One has to do a lot of research before buying a condominium. A condominium is a self-governing entity, which is recognized legally by the state. The condominium board of trustees is supposed to manage the property according to the "master deed" and "bylaws," collectively referred to as the "condo docs." Each condominium association has its own rules and bylaws, although there are often similar elements.

There are "common areas" in a condominium, and "units." The common areas are the public areas such as driveways, lawns, pools, and interior structural system of the building or buildings. The unit areas are the actual apartments or townhouses, which have defined boundaries as outlined in the association master deed. The association is responsible for the complete maintenance of all common areas (property taxes, street lighting electricity, landscaper, installing a new roof, etc). The unit owner is responsible for maintenance of their unit (property taxes, utilities, interior painting, appliances, etc).

The problem is that many condo association boards of trustees: (1) ignore the bylaws and change responsibility for common areas to unit owners, (2) manage poorly and deplete the association of funds, or (3) have conflicting condo bylaw rules established at inception, and then govern as best they can.

The following is a list of selected documents and issues to research before buying a condominium. Please note condominiums with well managed stable associations can often appreciate in value at a higher rate than single family homes (and depreciate faster with an unstable association).

 

Condominium Master Deed/Bylaws

Condominium Rules

Condominium Budget 
(current year & previous year)

Condominium Income Statement 
(possibly combined w/budget)

Condominium Reserve Analysis/Capital Plan

Condominium Meeting Minutes

Property Manager

Physical Inspection




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