--Back

Print

Email

Introduction To Buying A Condominium

A condominium is a common, or shared, interest in real estate. You own the title ("fee simple") merely to the "air space" the unit occupies. In the case of a townhouse, by contrast, you also own the land on which the unit sits and the air space above (up to about 500 feet). Both the condo and the townhouse share common spaces such as: walkways, landscaping, parking, recreational facilities (pool, gym, spa) etc.., which are shared by all of the owners in the development.

Common Problems Encountered When Buying A Condominium

There are two common problems faced by condominium owners. The first is the increased risk that individual homeowners will bring a lawsuit against the homeowners' association. The second is the delay that often occurs when repairs and maintenance are needed, which often causes the property value to deteriorate.

Before You Buy

Before you buy a condominium inquire about the following:

• Does the condominium development have covenants, conditions and restrictions, and if so, are they adequate? Conditions and restrictions such as minimum square footage, voting rights, size of the board, basic rules for the use of common areas.
• Is the development separately incorporated? If not, you could be headed for headache.
• Are any lawsuits pending against the homeowners' association? If so, find out what the dispute is about, and have a lawyer evaluate the claim, to ensure your pocket-book won't be affected by the outcome.
• Are there are rules regarding construction?
• Does the association have adequate reserves to handle maintenance and emergency repairs? Check the financial statements, because a low bank balance could lead to an increase in association dues or a larger onetime assessment.
• How old is the building and when was the last time a major overhaul was completed (e.g. new roof, plumbing, stucco/wood replacement, painting, etc...)
• Does the homeowners' association maintain fire, earthquake, hurricane and/or tornado insurance? If you live in California, the failure of the Board to maintain adequate earthquake insurance can lead to the entire structure becoming bank owned.
• How many people own, rather than rent? If more than 25% of the units are rented, you could have problems with noise, maintenance, and future resale value.

When buying a condo you should not need the assistance of an attorney, however it is important that you understand all of the documents, including the bylaws and the condominium rules, conditions and restrictions. If you are unsure about something, do not rely on the statements of the broker or agent; getting an opinion from an attorney could be money well spent.