What to Look for in Condo Paperwork - Jim Rayner Could Help Me Here... - Posted by soapymac

Posted by Jim Rayner on May 02, 2000 at 14:16:23:

hi roy,

  1. Who manages the association?
  2. Get the master deed and trust documents and read throughly
  3. Get past 3 years annual reports
  4. get past 3 years finacial statements
  5. get current annual budget
  6. get association amendments to trust documents
  7. get current list of rules and regulations

review documents throughly especially regarding common property and limited common property. review budget…should be line item type with sufficient annual reserve allocations for long term maintenance items separate from normal operational items. Reserve should be sufficiently large enough to handle necessary planned long term maintenance without assessments.
try to talk with some one on the board or at the mangement company to get a feel for the level of proactivness of the association.
the reserve funds should be invested in rolling 6 month cd’s at a minimum and larger reserves could be in longer term investments.

this is for starters roy give me a call its been along time since we last spoke

jim

What to Look for in Condo Paperwork - Jim Rayner Could Help Me Here… - Posted by soapymac

Posted by soapymac on May 02, 2000 at 13:51:45:

and so could anyone else who purchases condos on a consistent basis. Here’s the situation:

I want to move out of my apartment and into a condo. Located a nice (and I mean NICE!) 3/2 that is well located, and was well maintained. I’m not concerned about the money — what I need is available to me.

What do I look for with regards to the condo complex itself…the association, what about protective covenants, assessments…stuff like that?

This area is a scorching hot market for RE (has been for over three years with no letup in sight.) I don’t mind making adjustments for the market…it comes with the peapatch. However, I do not want to get “snakebit” because I did not ask the right questions.

Any help appreciated.

Cordially,
Roy MacLean
"soapymac"

Good link… - Posted by Mark-GA

Posted by Mark-GA on May 02, 2000 at 16:01:13:

I posted a similar question on another forum a while back. Here is the best response I received. I think it contains great advice.

http://boards.fool.com/Message.asp?id=1380625000016012&sort=id

Good luck!
Mark

Re: What to Look for in Condo Paperwork - Jim Rayner Could Help Me Here… - Posted by Jim IL

Posted by Jim IL on May 02, 2000 at 14:24:31:

Soapy,
I have bought a few Condos and Townhomes.
You have already brought up the very topic that I look into deeply with each one, the association.
Take a good look at the structure of the association.
Who runs it? (the builder, or the homeowners?)
Many times, when a condo/TH complex is being built, the developer runs the association for the first little while and then turns it over to the homeowners.
While the developer has the association, the fees are usually low. This is because there is less cost involved and also as a selling point to buyers.
But, after the homeowners take over, FEES DO GO UP usually.
Sometimes significantly.
Also, the rules and/or covenants of the association need to be looked into.
What do they cover with the fees?
Repairs? Which ones, and how often?
Maintenance? Lawn care? Trash? snow removal if applicable? What else?
Who pays what utilities?
Are there any projects slated to be done, like major road or parking lot repair? Roofs? Siding? Anything you can think of and some you may not?
Are there funds to cover this, or will the homeowners have to pay an additonal assessment to cover this?

Look at what you want to do with the place in the future? Are you going to stay there yourself and then turn it into an investment property and rent it out? Sell it utright? L/O it?
Do the Assoc covenants/rules allow this?

And, lastly, talk to some other homeowners and get a feel for what it is like to deal with the association and/or management company hired by them?

Just check everything out and go ahead and get the condo if it works for you.

HTH,
Jim IL