BUYING A CONDOMINIUM – TIPS
Understand Condominium Law
Many buyers don’t realize that buying a condominium is considerably different than buying a house. We strongly recommend that you obtain legal advice from a lawyer who understands condominium law prior to buying a condo, so you don’t end up stuck in a mire of legal complications with potentially harsh financial consequences. Thus, before you make a condo offer, please be certain that you understand at least the following basic considerations of condo ownership:
- Exact details of the proposed condo unit and all common property.
- Rights and responsibilities of ownership.
- Condo Fees – amount and frequency.
- Condo Services – what precisely are you getting for your condo fees?
- Special Requisitions – will you be responsible for future reserve funds or special assessments?
Required Documents …
Your realtor can work with you to obtain the following documents prior to finalizing your condo purchase:
- Estoppel Certificate
- Certificate of Insurance
- Financial Statements of the Condominium Corporation
- Bylaws of the Condominium Corporation
Standard purchase agreements used by realtors for the sale of condo properties typically include a clause stating that the seller will provide the buyer with a copy of these documents prior to finalizing the transaction.
This document is provided by the condominium corporation (or property management company for the condominium corporation) and it provides you with important certifications regarding your condominium unit and condominium building. Some of the important information provided in the Estoppel Certificate include:
- The status of the monthly condominium fees.
- The existence of special assessments.
- That no liens or charges exist against the title.
Certificate of Insurance
A prudent buyer will carefully review this document to ensure adequacy of insurance coverage on both the individual unit(s) being purchased, and on the common property of the condo building as well.
A prudent buyer will also be interested in the current financial records of the condo corporation, which should provide you with statements respecting the following:
- An indication of the financial position and quality of financial management of the corporation.
- The adequacy of the corporation’s reserve fund.
- The reasonableness of the corporation’s budget.
You may be wise to seek the advice and assistance of a certified accountant in reviewing these financial records.
We recommend that you seek your lawyer’s advice and legal expertise regarding the particular bylaws of the condo building you’re looking to buy into, to ensure that you find them acceptable and reasonable. Typical condo bylaws include:
- Information on the operation and management of the corporation
- Condominium board election and meeting procedures
- Rights and restrictions on the use of individual units and common property
- Responsibilities of owners
Please feel free to contact us if you have any questions that aren’t answered on our site, or to schedule an appointment. We’re always happy to chat with you about any of your legal needs.
- Phone: (587) 272-2050
- E-mail: email@example.com