Here are my top 10 questions you should find out before you purchase one.
Some of these items may or may not be released until a contract is signed.
We STRONGLY suggest you get these answer prior to the contract being placed out of attorney review.
HOME OWNERS DUES / MONTHLY MAINTENANCE HISTORY QUESTIONS
QUESTION 1. What has been the history of increases in the HOA fees for the last 10 years?
Better ask and check about the past increases of Association fees over the last 10 years, someone should be able to give you a history of increases, the best source would be the Condo Management Company.
QUESTION 2. Can I see the latest financial records?
Before making a condo purchase offer, you are entitled to a copy of the latest financial statement for the complex to check the reserves, annual income and expenses. Look over the annual budget and minutes of the last few directors’ meetings, too. The listing Realtor should have this information easily available.
QUESTION 3. What does the maintenance fee actually cover?
All associations are different in what is covered, typically it would cover exterior items such as snow removal lawn care etc. Some cover water and sewer charges some not.
QUESTION 4. Are they any current “Special Assessments” and when was the last one?
When was the last (if any) Special Assessment given and for what was it for?
RESERVE FUND QUESTIONS
QUESTION 5. How much is in the Condo Reserve fund, is it adequately funded?
In a typical condo, 25 to 35 percent of your HOA fees should be going to reserves. If your reserve is 70 percent funded or more is it good. Definitely ask that question of the Management Company.
Many times owners of condos are hit for “Special Assessments”. This is usually do to the Reserve Fund not being funded sufficiently.
QUESTION 6. When was the last time a “Reserve Fund” study was done?
Different states require a Reserve Fund study to be done to insure the community is being funded properly. Ask and find out when it was done and if a copy can be obtained of the results.
LAWSUITS FOR or AGAINST THE ASSOCIATION
QUESTION 7. Are there any current lawsuits against the Association?
If they are current lawsuits either against for by the Association it could affect your future HOA dues if the lawsuit is lost.
Usually simple slip and falls are not usually a concern. Be specially attentive to construction lawsuits. It could also affect the mortgaging of units.
If the association is involved in litigation, this can hurt salability of individual condos. Be sure the complex carries liability insurance and adequate replacement insurance.
QUESTION 8. What is the percentage of renters and owner-occupants?
The higher the percentage of renters, the less desirable the complex from a lending point of view.
If more than 25 percent of the units are occupied by renters, that’s a bad sign. Ask if the complex has rental restrictions. If it does, that’s a good sign.
RULES AND REGULATIONS
QUESTION 9. Can I see a copy of the bylaws?
Are there any unusual bylaws, rules or CC&Rs (covenants, conditions and restrictions)? The listing agent should have copies of these documents for you. Study them. Ask about pet and rental restrictions (they can add to a condo’s desirability and market value). Watch out for “first right of refusal” restrictions, which give the homeowners’ association the right to buy any condo that comes up for sale.
QUESTION 10. How good is the soundproofing and safety construction?
Before buying a condo, be sure to check its soundproofing. The No. 1 complaint of condo owners is poor soundproofing.
Do yourself a favor and Google “AVALON BAY FIRE IN EDGEWATER”.
In short…Borough zoning board members criticized the Avalon Bay company’s plan to use hollow cinderblocks instead of solid ones in the building’s firewalls. Hollow cinderblocks are more than is required by the state’s building code, but board members questioned why they didn’t opt for solid blocks.
Premier Properties The Damiano Group
39 E Main St #1
Little Falls, NJ 07424