Understanding Your Rights as a Member of a Condo Association

Whether you’re a first-time homebuyer considering a condo, or a current homeowner interested in a condo as a second home or an investment, there are a number of questions you need to ask the condo board before you decide on a particular property. Your REALTOR® can help you with your information gathering.

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. In the process of asking the following questions of the board, you’ll also learn how responsive—and organized—its members are. It is important to understand how the association is run and what financial responsibility you have before you have purchased a unit.

1. What percentage of units is owner occupied? What percentage is tenant occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can’t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them; also, have an attorney review relevant documents for you, including the master deed.

3. How much does the association keep in reserve? How is that money being invested?

4. How is real estate property tax assessed – on an individual, unit-byunit basis or collectively for the entire property? Who is responsible for paying the tax?

5. 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.

6. What does and doesn’t the assessment cover—common area maintenance, recreational facilities, trash collection, and roof maintenance?

7. 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 building or the board’s fiscal policy.

8. How much turnover occurs in the building/property?

9. Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.

10. Are multiple associations involved in the property? In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.

If you’re in the market for a condo and you need to know more about condo ownership, consult a REALTOR®.