What is it that you should know about the condo association when buying a condo?

Condos are a popular option for many home buyers in Boston. Prices for condos are more affordable than those of single-family homes, and there’s less upkeep involved. For busy professionals, condos are generally a better fit for busy professionals who also travel frequently.

The residents within a condo building are part of a homeowners association (HOA). In larger buildings, there’s usually an HOA board, too. These entities make decisions about the property with respect to expenditures, special assessments and other issues that arise.

There’s a lot to evaluate when you’re considering a condo purchase. I thought I’d put together a primer on the basic condominium assoc. disclosures and documents of consequence so you’ll know what to expect when you locate a condo you like and may want to write an offer on.

CC&Rs:

The “Conditions, Covenants, and Restrictions” are the bible of your condo assoc. CC&Rs are typically boilerplate for each association, and are drawn up by a real estate attorney and recorded with the city. They cover key details such as what percentage of the common area is allocated to each unit and what exclusive-use areas exist. The CC&Rs outline the responsibility of the condominium assoc and how issues such as delinquent HOA dues and unit remodeling are to be handled. It’s key to note the voting rights within the association, too, as well as how special assessments (additional charges beyond monthly condo dues) are managed.

Most specifically, CC&Rs outline use restrictions, such as pets, garbage disposal, right to lease, and occupancy limitations. These are important because they sometimes deviate from boilerplate matters. Some CC&Rs ban certain dog breeds, and if you prefer hardwood floors, it’s important to note whether you’ll have to put down area rugs to mitigate foot noise. A very significant limitation may be on renting your unit; make sure you’re aware of any restrictions if your future plans include holding the condo as rental property.

Finally, CC&Rs include the condo map, which is a diagram of each level of the building. You should make sure what you’re purchasing corresponds with the map, such as parking and storage. When you make a subsequent visit to the property, make sure your deeded parking and storage correspond to the condo map. And pay attention to amendments or exhibits that were added to the original CC&Rs. They may represent information that supersedes the original document.

Boston Condo Association Bylaws: 

This document typically outlines the duties of the condo association board, and is usually boilerplate.

Condo/Financial Disclosure:

This one pager confirms the current condo fees for the unit, as well as the amount in “reserves.” The latter is the money available in the condo assoc, bank account for maintenance and building expenditures. For larger buildings, you will want to see a reasonable amount in reserves. For smaller buildings in Beacon Hill, Back Bay ect, it’s not unusual to have nothing in the reserves. Residents typically use a pay-as-you-go approach. The condo disclosure states whether there’s any pending litigation, and also confirms whether there’s a move-in/move-out fee.

Boston Condo Assoc.Budget: 

Depending on the size of the building, a budget can be as simple as a one-page document showing all the annual expenses and income, or a multi-page booklet that spans several years. Things to look for are reasonable maintenance and upkeep operating expenses, as well as projected income. Also, some large buildings will have one or more “reserve studies” on file. This is an estimate of the life of major building components, and how much it will cost to maintain and replace them over, say, a 30-year period.

Boston Condo Assoc, Insurance: 

You should receive a declaration of current condominium assoc insurance for the building. This insurance does not cover individual units; most lenders are requiring individual unit coverage these days. Make sure you know what’s covered, and get some quotes for your own unit. Pro tip: If the condos assoc. insurance is about to expire, have your agent inquire about prospects for policy renewal. If there’s a possibility the condominium assoc policy could cost significantly more after renewal or a change in the insurer, you’ll want to know that for budget purposes.

Condo Assoc. Meeting Minutes:

Most Boston condo associations meet quarterly, some meet monthly or annually, and some don’t meet at all. If any meetings have taken place, there will usually be minutes taken by an association member. These should be included in the disclosure package. This is where you’ll be able to read about garage break-ins, the neighbor who’s playing his music too loud after 11PM or other issues.

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Updated: Boston Real Estate Blog 2024

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What is it that you should know about the condo association when buying a condo?

Purchasing a condominium in an urbanized region such as the Greater Boston area can provide homeowners numerous features, including convenience to a metropolitan’s eateries, stores, recreational activities, and beyond.

What is it that you should know about the condo association when buying a condo? A condo owner should know: How much money does the condo association have. What are the latest fixes? What is the owner occupancy? What is included in the condo fee? Are there any stipulations in the regulations?

Generally, there’s an entity like a management company, association, or board of directors that manages the property. These corporations usually assume control over tasks like shoveling snow from driveways, lawn maintenance, etc., that single-family homeowners must complete on their own.

The perks change depending on the property or the organization. Homeowners commonly receive a communal area, snow shoveling, roof fixes, cladding fixes, or servicing for a leak.”

Apart from looking after the estate, the association must administer the funds of the building. This monetary stipulation affects every individual unit that is managed by the association. Prospective condo buyers should inquire in order to build confidence in the company.

Potential buyers should research the whole building’s financial standing, not just the single unit they are interested in. It is essential to keep in mind that when buying into a condo, you are joining a community and taking part of an entire property, not just one individual apartment.

Here is the list of queries that Relators suggests condo-buyers inquire about before submitting an offer:

How much money does the organization have?

Potential purchasers should review the condo organization’s financial statements to ensure it is generating a profit.

Examine the funds held by the organization. Has money been put aside over time for larger expenditures like a furnace or renovations?…It is essential to comprehend the accounting of the association.

What are the latest fixes?

What can be anticipated in the future? Potential condominium purchasers to gain understanding into which renovation projects should be performed on the premises and which ones have already been completed.

Comprehend the alterations in the structural integrity. To what extent has the structure been kept up? determine if there are future outlays that need to be planned for.

What percentage of the space is occupied by the owner?

Will you be situated near those who own the property or those who are leasing? If a lease is in place, what conditions does it include? Being mindful of the number of inhabitants that are proprietors is crucial not only for owners to comprehend who they will be living near; but it can also have an effect on potential buyers’ capability to secure financing.

For banking institutions, more leasing occupants than landlords in the structure creates higher danger. Creditors ponder that buildings with a greater portion of proprietors inhabiting them are more secure investments in comparison to those with an increased ratio of individuals who don’t stay in the building.

What is included in the condominium fees?

Examining a corporation’s funds is a beneficial manner of grasping precisely what is encompassed in the periodic condominium payment. Condo payments may fluctuate substantially among associations since each one can provide diverse advantages.

Perhaps one comes equipped with an elevator, but its usage accompanies a financial cost. Alternatively, similar facilities may range from exercise areas and car parks to snow clearance or gardening.

This is an additional motivation to analyze a firm’s financial plan, as it can assist a potential customer discern if the business is generating a profit or if dues need to be adjusted based on inflation.

Are there any stipulations in the regulations?

Certain organizations could have regulations set out in their statutes and constitutions that may alter customers’ schemes for the ideal apartments.

Certain structures may possess limitations regarding renting out the abode should the occupant vacate, as well as prohibitions concerning remodeling.

At times, an association’s guidelines may limit the amount or assortment of pets allowed.

What occurs following the purchase of the condominium?

Residents should remain involved in the decisions of the condominium.

Boston apartment purchasers can take an active role in the collective, particularly if it’s a larger property, such as participating in condo gatherings or joining the executive council.

Do not expect favorable results without any input. Becoming active in a community is vital to keeping it in good condition.