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Text Box: Townhouse And Condominium Associations

 

Text Box: Repairs And Maintenance

Text Box: If you have never attended a Homeowner's Association meeting--whether for a Townhouse or a Condominium association--you many not be aware of how pervasive they can be and how important it is that you investigate an association when you buy a townhouse or condominium. The Homeowners' Association has a number of duties and responsibilities. It will be responsible for not only the day-to-day operation of the complex, but also for long term planning. It is this association that monitors adherence to the various restrictions--for example what modifications you can or can't make to your unit--for the entire complex.

 

 

 

 

 

 

 

 

 

 

 

 

 

Text Box: In general, the association will take care of all of the exterior upkeep of the buildings and grounds. This can vary a little from association to association, so it is important for a condominium or townhouse buyer to have a clear idea of exactly what will (or will not) be covered, so as to not have a big surprise when you find out that you--and not the association--are responsible for some needed exterior repair or maintenance.  

 

 

 

 

Text Box: Covenants, Restrictions, And "Don't Even Think About It

 

 

 

Text Box: Every condominium and townhouse association is required to file a declaration of covenants, conditions and restrictions. Simply put, this document discloses precisely how the homeowners' association is to be structured, exactly what its duties and responsibilities are, and what restrictions are to be placed on all owners as to acceptable modifications and improvements to their individual units. This document will be specific--for example, it may state that no owner can make any modification to the color of doors or windows, or may even stipulate what type of interior window coverings in the way of curtains and drapes that are acceptable. The goal is to have as much uniformity throughout the complex as possible.

 

 

 

 

Text Box: The Financial Health Of The Association

 

Text Box: One aspect of the association that you will want to investigate closely for any townhouse or condominium that you are considering is its financial condition. Associations are required to develop an annual budget for both income (homeowners' fees) and expenses, as well as the current state of its financial condition. The more solvent (the more cash reserves available) an association is, the more protected the homeowners are. If there is a lack of cash reserves and an expensive repair becomes necessary, there is only one place for the association to go to get the needed funds: From the homeowners via a special assessment (a one time charge to all members of the association).

Text Box: Buying a Townhouse or Condominium: What Should You Consider?

Text Box:   1. How many units are in the complex?   2. Percent of units sold?   3. Percent of units that are owned by occupants?   4. How much are the monthly home owners association dues?   5. What do these dues cover?   6. How often to dues increase or decrease?   7. Is there an expected increase in dues?   8. What additional coverage will you need?   9. Is the homeowners association professionally managed? 10. How much does the association keep in reserve accounts? 11. Are there large expenses expected in near future? 12. Are there any special assessments in the near future? 13. Are pets allowed? 14. Is the HOA involved in any litigations? 15. Can you rent your unit? 16. How many parking spaces are reserved for you? 17. How many storage units are reserved for you? 18. Are there restrictions that will affect your lifestyle? 19. What do current owners like about complex? 20. What do current owners dislike about complex? 21. How sound proof is the complex? 22. How thin are the floors? Can you hear people walking? 23. How are the water / heating / plumbing / etc systems working? 24. Are sale prices going up? Down? 25. What are the turnover rates for condo sales?  

 

 

 

 

 

Text Box: Questions you should ask:

 

Text Box: Tired of mowing the lawn? Ready for a low-maintenance lifestyle? Perhaps it's time to consider buying a condominium or townhouse. But before forging ahead, consider the following. When you buy a single family detached residence, you become the exclusive owner of the structure and the property it's located on. The property boundaries distinguish what is yours from what belongs to your neighbors. When you purchase an attached dwelling such as a townhouse or condominium, you obtain exclusive ownership rights to the interior space of your particular unit. But, you own the common area-grounds, fences, shared walls and facilities-with other owners in the condo or townhouse (also called a planned unit development or PUD). As a condo or townhouse owner, you automatically become a part of a homeowner's association to which you pay dues, usually on a monthly basis. Homeowner's dues usually cover the cost of maintaining and insuring the common areas. Precisely what the homeowner’s dues cover varies from one complex to the next, so make sure you find out what's covered before buying. The dues may also fund a reserve account to cover major expenses like resurfacing tennis courts or replacing homeowner's roofs. Buying a condominium involves some of the same issues that are involved in buying a detached home. The unit should minimally meet your housing needs, be within your price range, be reasonably priced and be thoroughly inspected by a professional home inspector. But additional issues come into play when you buy into a PUD.  First Time Tip: Attached housing projects are governed by Covenants, Conditions and Restrictions (CC&Rs) that restrict ownership rights. For example, CC&Rs may include restrictions on remodeling, parking and renting. Some CC&Rs prohibit pets. Make sure that you read and understand the CC&Rs before you buy. If the CC&Rs are cumbersome and incomprehensible, hire an attorney with expertise in PUDs to review the CC&Rs for you. Be sure to read the bylaws and articles of incorporation of the Home Owner's Association and review a current financial statement. It's also advisable to obtain copies of the minutes from the last several homeowners’ association meetings. Find out if the homeowner's association is involved in any litigation. Perhaps you've heard horror stories about condo owners suing the developer for shoddy construction. If a condo seems under priced, there may be a reason for this. If the association loses the case and does not have sufficient reserves, the condo owners might have to pay to repair the defects. One of the best ways to get information about a PUD is to talk with current owners. Be sure to ask what they like and dislike about living there. How is the soundproofing? Are there any parking problems? Is there ample storage space? Are the current owners satisfied with the homeowner association management? A condo that is unique should raise a red flag in your mind. One buyer paid top price for a condo that had an enclosed balcony that was furnished as a home office.  Years later, the association management began strictly enforcing the CC&Rs. It was only then that the buyer discovered that the balcony renovation was in violation of the CC&Rs. The CC&Rs clearly stated that the only furniture allowed on the decks was patio furniture. The lack of a home office diminished the value of the condo significantly because it was a small studio unit. When the buyer sold, she sold at a loss.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Text Box: Things you should do:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Text Box: 1. Review CC&Rs - Covenants, Conditions, and Restrictions 2. Attend home owners association meeting 3. Review bylaws and articles of incorporation, or have attorney review them 4. Review past home owners association meeting minutes  

 

American Dream Home Inspection LLC
Helping you realize your American Dream
Phone: 847-638-6471                                                                                                                     Fax: 847-387-3036
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