Things to be aware of if you buy a condominium
Owning a condominium presents a variety of different problems compared with owning a single-family home. Even though you own your own space in a building of several condo apartments, you remain part of a group.
Who manages and maintains the building, for example? Once all or most of the apartments are sold, management of a condo complex is assumed by all owners acting through an association. Large complexes will usually be managed by a company organized to provide maintenance, rental service, collection of rents and bills, and clean-up services in response to an owners association. The fee for a management company is paid by all members.
Provisions included in a condo deed call for regular payments for expenses common to all units. One can't, for example, expect the owner of a top-floor apartment in a three-story building to assume all costs for keeping the roof intact simply because he is closest. Elevator maintenance, roof and exterior repair, hall cleaning, upkeep of a swimming pool and other amenities, and similar common costs are assumed by all owners. If one or more owners fail to pay their share, the bill can be collected legally. As a last resort, the expenses associated with one unit can be recorded as a lien against the title. A lien must be cleared before a unit can be sold.
Few problems arise when owners occupy their own condos. But when a condo is rented, a disruptive tenant could be a problem. Rules established by the condo owners association will usually outline procedures for evicting undesirables.Some associations delegate authority to pass on prospective tenants to a committee of owners. If a large complex is professionally managed, screening of prospective tenants will usually be part of their function. Many cities have enacted landlord-tenant codes that must be followed, but strict control is possible as long as the condo owners association functions. When you buy a condo, plan to share management functions through an owners association.
Early on, when condominiums were a new oddity in the homeowning field and lenders were not always fully aware of the law and its provisions, reselling was sometimes a problem. Financing that came easily with an original sale might not be available for a resale. Such suspicions have largely disappeared, and condo resales are handled as easily as single homes on separate land in most areas. Of course, a buyer must be interested in a condo and not a single house. These are two different markets. But, the number of buyers interested in condos appears to be expanding. Whether a real estate agent will charge a higher fee for a condo than a single house depends on the market -- and the agent. Ordinarily, getting permission of other owners is just another hazard to be overcome when selling a condo.
Owning and living in a condo are different enough from owning a single house that y ou should investigate the details. Read and understand the organization and bylaws of the condo owners association. Inquire among other owners how the association is working. On a new building find out how much of the common expenses are being paid for by the builder-developer and how many units must be sold before the owners assume management responsibility.