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Article Courtesy of The Orlando Sentinel
By Pamela Dittmer McKuen
Published October 21, 2016
Condominium sellers customarily pay any upcoming special
assessments, but Natalie Renna of Re/Max Vision 212 writes the clause into
her contracts to make sure.
Recently, while a sale was pending attorney review, the association levied a
$15,000 special assessment. Renna's first-time buyer was protected from
paying.
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"Surprises like that
aren't fun," said the Chicago real estate broker. "Thank God
I put it in the contract."
Condominium living can be full of surprises. If you're
thinking about buying your first condo, the following advice
can help you avoid the worst:
Condo is a lifestyle, not a living space. In addition to
getting fancy finishes and huge closets, you're joining an
association of homeowners, and you have to do things their
way.
"If you can't conform well to authority within the
condominium arrangement, it might not work for you," said
association attorney Charles VanderVennet, of Arlington
Heights.
You'll learn a lot by exercising your rights under Section
22.1 of the Illinois Condominium Property Act. The law
allows prospective buyers to request several documents
pertaining to the association's financial condition and way
of life. They are dense reading, but there are a few telling
items novices should look for. |
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Look beyond selling prices when figuring your costs.
For example, monthly assessments cover different services in
different condo buildings. Read the condo
association's documents carefully.
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Perhaps the most important are the rules and regulations,
said Beth Lloyd, a real estate broker at Coldwell Banker Residential
Brokerage in Schaumburg and president of the Association of Condominium,
Townhouse and Homeowners Associations.
"Buyers often don't realize that associations have rules that can restrict
pets, the ability to rent now or in the future, and running a business from
their unit," she said.
The board's monthly meeting minutes can give a sense of whether the
association is laid-back or dictatorial, said real estate broker Michael
Michalak of Re/Max Exclusive Properties in Chicago.
"If there's a bunch of crazy people, or if they fine people all the time, it
might not be the right place for you," he said.
One of Michalak's recent deals fell through because his buyer has a 65-pound
dog, and the board wouldn't budge on its 50-pound weight limit.
Compare apples to apples. Look beyond selling prices when figuring your
costs. For example, monthly assessments cover different services in
different buildings.
"Some will charge you $400 a month, and only water is included," Renna said.
"Or you might pay less and get a lot of utilities and maybe cable and
internet."
Property taxes can vary drastically from one neighborhood to another for
similarly priced units, she said. Moving fees, which typically range from
$100 to $500, add up if you plan to lease your unit, Michalak said.
Count the association's money. You're buying a piece of the swimming pool,
landscaping and other common elements, and you're expected to help pay for
them, said Patricia Bialek, vice president of property management at
FirstService Residential in Chicago.
Look for a heading called "reserves" in the association's financial
documents. That's the savings account for expensive replacements like roofs
and boilers.
It's not scientific, but Renna likes to see an amount of at least $2,000 per
unit in the reserve pot. New buildings may have less, but they probably
won't have big expenses for a few years.
Maintenance-free living is a myth. It's true that condo associations
generally handle snow removal, lawn care and maybe window-washing, but
owners have obligations.
"Everybody has a role," said VanderVennet. "The owner's role is to elect
good board members, pay assessments, be eyes and ears for potential problems
and comply with the covenants so they don't become a problem."
"Whatever happens inside the walls in your property, from drywall to
drywall, that's yours," Renna said. "If the stove breaks down, it's your
responsibility to take care of it."
Scott Oblander, regional director at FirstService Residential in Chicago,
said the No. 1 complaint from new condo owners is "I thought the association
took care of that."
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