Buying a condo is a huge commitment. From finances to community rules, it’s important to grasp all aspects that are included in ownership. Before you commit, asking the right questions can help you avoid surprise fees, restrictive policies, and future headaches. Here are 15 questions that will help you make a smart, informed purchase.
What are the COA fees?
One of the biggest questions you may have when buying a condo is what you will need to pay as an owner. Knowing what the fees are and how often they are charged – annual, biannual, or quarterly – will help you prepare and see if it is worth the investment.
What percentage of the condos are homeowner resided versus rented out?
Having a high rental ratio within a condominium can impact loan approvals, insurance premiums, and community upkeep. Any potential rental restrictions established by the condominium association will be outlines in the governing documents.
What amenities are there?
It is good to know what amenities you have! Common amenities include gyms, pools, parking garages, and common spaces. While touring, keep note of the conditions of each amenity, since your fees are meant to keep them working in good condition.
When was the building built, and have there been any major replacements/upgrades?
Knowing how old the building is before purchasing a unit can prevent headaches. An older building is not necessarily bad, but it does increase the demand for consistent upkeep. Has the roof or siding been replaced recently? These are important questions to ask!
What maintenance does the building provide?
Who is responsible for repairs on windows, HVAC, and balconies? It is important potential owners understand what they need to pay for outside of condo fees before making a decision.
What are the everyday rules/restrictions to abide by?
- Breed and weight restrictions for pets
- Short-term rental policies
- Noise ordinances
Unlike other rules that come up occasionally, these rules can impact your day-to-day life. It is important to know if there are any rules you might struggle to abide by.
What does the master insurance policy cover?
Learn where the master policy ends and your policy begins. This can affect out-of-pocket costs for you determine what insurance coverage you need.
Is COA financially healthy?
Ask for the budget, reserve study, and recent financial statements. This information is public knowledge and should be easily attainable. If the COA is in poor financial health, expect frequent special assessments to keep up with repairs.
Any upcoming special assessments?
After learning about the COA’s financial stability, ask about any upcoming special assessments. This can help you learn about upcoming projects that could impact your day-to-day life as a new resident and add unexpected expenses.
How often have the fees increased in the past 10 years?
While the COA should keep up with factors like inflation and budget adjustments, they should also keep condo owner’s financials in mind. If fees increase regularly without understandable causes, that can be signs of a poorly budgeted COA.
How active is the board?
Having an active board means an active community! An active board can lead to more events, a transparent lookout at how the building is run, and better give owners a better understanding of the budget.
Are there any known water intrusions, mold, or structural issues?
This can apply to your individual unit or the building. It can help you prepare unexpected costs.
How often are rules enforced?
Is the association too lax (messy common areas, noise complaints), too strict (constant fines and letters), or just right (consistent and predictable) when enforcing rules? This question can be tricky to ask, so consider “How does the COA typically handle rule enforcement, and how often are violations issued?”
Is there a management company or is it self-managed?
While COA management companies add costs that a self-managed association can avoid, they also provide more consistent enforcement, better financial tracking for owners, and easier communication between the association and residents. Self-managed COAs can lead to burnout and inconsistent enforcement but are cheaper and have more flexibility. Finding what works best for you, as a buyer, is the most important factor.
Considering a COA management company? Look into Kiwi Condo Management today!
Is the COA involved in any lawsuits?
A COA involved in litigation creates a big mess potential owners should be cautious of walking in to. Lenders will not approve loans, legal costs can lead to higher assessments, and resale can be harder. Learn what legal battles the COA is in to avoid any future headaches.
Buying a condo can be a rewarding investment if you know what you are getting into. Asking these questions can help you spot red flags early and save you money, stress, and regret down the road.
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