9 questions to ask the condo association
When you buy a condo, you join an association of owners that determines everything from whether to plant perennials in the courtyard to how to finance a major roof project. Before you buy, contact the condo association with the following questions. In the process, you’ll learn how responsive - and organized - its members or management company is.
- What percentage of units are owner-occupied? What percentage are tenant-occupied? How about short-term rentals? Generally, the higher the percentage of owner occupied or short-term units, the more marketable units will be at resale.
- What covenenants, bylaws and restrictions govern the property? Are pets allowed? If you must have your pet with you, it would be a good idea to make sure that you can. River Run Village in Keystone and the New Village at Copper don’t allow pets for tenants or owners. Ask for a copy of the bylaws to determine if you can live with them. And, have an attorney review property documents for you.
- How much does the association keep in reserve? How is that money being invested? Do they have five or ten year plan for major repairs and improvements and how to pay for them?
- Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.
- What does and doesn’t the assessment cover - common area maintenance, recreational facilities, trash collection, snow removal? Be aware that some complexes cover heat and others don’t.
- What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the property or the board’s fiscal policy.
- How much turnover occurs in the building?
- Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.
- Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions of the developer.
A final note: remember to play nice. When you buy into a condo building or homeowners association, you join a group with a variety of personalities and agendas. Negotiation and cooperation are key to living in harmony.
