Condos are ideal for retired couples because of their ideal space and low maintenance costs. But before you buy a condo, remember that there are important questions you should be asking before you sign on the dotted line.
1. What complaints has there been against the unit?
Review the minutes of the condos association board meetings and see what the current (or previous) owners have complained about. This lets you know if the complex is having issues that you should be aware of.
If there hasn’t been any issues raised, you should still review the minutes of the condo’s board meetings to see what kind of projects have been underway at the complex.
2. What are the delinquency rates of the present owners?
Owners taren’t paying their association dues on time? This could be a sign that there is discontent or that the association is underfunded.
3. How much is the repair reserve fund?
Residents who brag that they don’t pay much in maintenance may be in a complex that either is not being kept up well or is living beyond its means.
Ask if the community has done a reserve-fund review in the past five years. Here’s a good rule of thumb: If the complex is one to 10 years old, the reserve fund should have 10% of the cost of replaceable items (roofs, roads, tennis courts, etc.). Between 10 and 20 years old, the repair fund should be at 25% to 30%. At 20 years, that amount should be 50% or above.
4. Can I take get a copy of the certificate of insurance?
Get a copy of the certificate of insurance, which is a summary of the association’s policy. This will ensure that you understand exactly what the association policy covers and what you are responsible for. This way you can insure your personal belongings, along with any other items within the unit that are not covered by the association’s policy.
5. Are there any legal issues to be aware of?
Find a local real estate lawyer and have him or her go over the bylaws of the condo association and find out if they make sense and are consistent with your state’s laws.
You should also have the lawyer screen the association at the local courthouse, to see if any owners have filed suit against it.
7. Am I responsible for my Unit’s upkeep?
Many people buy condos because of the low maintenance fees. But you should watch out for a condo whose owners manage the place themselves.
If the complex is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners. Ask people in nearby buildings. And be sure to interview the day-to-day manager directly.
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