Why Get a Condo Doc Review Done?
Reviewing condo documents is crucial when buying a condo for several reasons:
Understanding Financial Health: Condo documents, such as the budget, financial statements, and reserve fund studies, provide insight into the financial health of the condo association. This includes the amount of money in reserves, outstanding debts, and the budget for maintenance and repairs. Knowing this helps you assess if there might be future special assessments or fee increases.
Governing Rules and Regulations: Documents like the bylaws, declaration, and rules and regulations outline what is and isn't allowed within the condo community. This includes pet policies, rental restrictions, noise regulations, and more. Understanding these rules ensures you know if the condo aligns with your lifestyle.
Pending Litigation: Checking for any ongoing or potential litigation involving the condo association is essential. Legal issues can lead to significant financial costs and impact the overall stability and reputation of the condo community.
Special Assessments and Maintenance Fees: Reviewing the history and frequency of special assessments can indicate how well the condo association manages its finances and plans for large expenses. Consistently high or frequent special assessments might be a red flag.
Maintenance and Repair Plans: Understanding the association's maintenance schedule and upcoming major repairs helps you anticipate future disruptions and costs. It also reflects the association’s diligence in maintaining the property.
Insurance Coverage: Reviewing the association's insurance policy helps ensure that the building is adequately insured, and you understand what is covered and what isn't. This can affect your own insurance needs and liabilities.
Meeting Minutes: Reviewing recent board meeting minutes can provide insight into current issues, resident concerns, and the general functioning of the condo association. It helps you gauge the community atmosphere and management's responsiveness to problems.
Ownership and Occupancy Ratios: High renter occupancy versus owner-occupancy can affect the community atmosphere and potentially impact financing options, as some lenders have restrictions based on these ratios.
By thoroughly reviewing these documents, you can make an informed decision and avoid potential surprises or issues after purchasing the condo.