What to Look for When Condo-Shopping?

[ivinsfan]

We just rented a very high-end ocean front condo in Virginia Beach for one month. A lovely 10 year old building. We got a unit on the top floor because we don't like noise.

The renting agent lived 10 minutes away and was very friendly.She managed and rented 3 or 4 units owned by some of her friends. The condo was great, however the first weekend, after a nice walk along the oceanfront, we came back to find a semi-obscene note under our door. Apparently there had been a huge water leak that started in that unit and damaged all the units underneath and even some of the adjoining units.

It caused a lot of water damage and expense. The letter said we understand from the condo bylaws that we have no legal recourse to collect any damages from you and we are not happy about that at all. You caused us a big financial hit and we think you are a horrible owner and blahblahblah. Not pleasant at all and of course it was unsigned, it just said your unhappy neighbors.

I called the leasing agent and she said yes that happened, it was an unforseen equipment failure and not negligence, but they are being very nasty because A LOT of water damage was done....as the condo was not occupied at the time of the water leak. she asked me to drop the note at her house as she was going to complain to the condo board about the harassment...parking spots were labeled with the unit number and I half expected to see our car had been keyed.

We came away confirming our feeling that condo living would not be in our future!

 

[Sunset]

People in different places use the Condo to mean different things. Most folks think they are referring to a type of home like a high-rise apartment building , other folks think it means townhouse, or garden home living. Some consider it Single Family homes with a HOA.
I view it as legal definition that applies to all the above, as I've seen all the above registered as different condo's.

Folks have already mentioned the financial paperwork is very important with Condo's as you are buying an obligation and are responsible for community property repairs.

I walked away from a townhouse condo purchase one time after reading the upcoming obligations that the reserve fund could not come close to handling.

Currently I have a townhouse condo, and over the years have been subjected to extra fees to cover the condo expenses that went beyond the budget on avg every 3 years.
I pay $313/mo condo fee, and this year have another special assessment of $500 to pay.

Certainly part of the problem is when a few owners stop paying or are just very late with their fee payment, it raises the costs and expense to all the remaining owners.

 

[haha]

Well, another very negative review of condo ownership was posted on the Living Stingy blog today: Living Stingy basically he argues- in regards to that Florida situation to which I referred in my earlier post -that it applies to ALL condos everywhere:
"How can you avoid such a financial fiasco? Well, to begin with, Never buy a Condo! As I noted in that posting, you are not buying real property, just the right to occupy. And you are not buying control of your property, just membership in a half-assed and poorly run corporation. You have little in the way of rights and a lot in the way of responsibilities. Free-standing properties are always a better value as a result."


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This actually is not true in most states anyway, a coop is a corporation, a condo is a fairly complex type of deeded ownership of real property. I believe that a condo has more in common with a subdivision with an HOA, a common or party room, a pool and some other areas (common areas) owned in common with other owners in the condominium. The situation of a forced sale as in this article is likely different on every state, and it is a complex question for a skilled RE attorney, which I am not.

Ha

 

[Birdie Num Nums]

... Otherwise, if your city is not going crazy with rents, check out quality apartments that cost too much to attract sketchy tenants.

+1
I didn't do this by conscious choice, but by happenstance last summer, when I moved to this new apartment after 32 years in a large residence. The rent was a couple of hundred dollars more a month than I was planning, but after some eight months here I am appreciating the added value of gated underground parking, night-time security, well-kept grounds, and absence of riff-raff neighbors--among other things (including the fantastic view I have and unique floor-plan that ain't just a big square main living area). I often visualize the other apartments I scouted before choosing this one, and am so happy I am not living in any of those others. I can imagine the significant difference in my day-to-day living.

 

[imoldernu]

What everyone else said. Take a look a the law. This is for Florida, but most will apply in other locales.

Statutes & Constitution :View Statutes : Online Sunshine

 

[jim584672]

I own a condo. We had a proxy war recently. The board wanted to severely restrict the right of owners to rent. After much wrangling the proposal failed, did not get 2/3 of owners for the by-law change.

I strongly opposed the measure as it would have crimped my options and diminished the resale value of the unit.

 

[haha]

+1
I didn't do this by conscious choice, but by happenstance last summer, when I moved to this new apartment after 32 years in a large residence. The rent was a couple of hundred dollars more a month than I was planning, but after some eight months here I am appreciating the added value of gated underground parking, night-time security, well-kept grounds, and absence of riff-raff neighbors--among other things (including the fantastic view I have and unique floor-plan that ain't just a big square main living area). I often visualize the other apartments I scouted before choosing this one, and am so happy I am not living in any of those others. I can imagine the significant difference in my day-to-day living.

Sounds very nice. IMO, the goal is not to live as cheaply as we can, but as pleasantly as we can at a price we feel OK about.

Ha

 

[aaronc879]

Currently I have a townhouse condo, and over the years have been subjected to extra fees to cover the condo expenses that went beyond the budget on avg every 3 years.
I pay $313/mo condo fee, and this year have another special assessment of $500 to pay.

Certainly part of the problem is when a few owners stop paying or are just very late with their fee payment, it raises the costs and expense to all the remaining owners.

I live in a two-building 24 unit condo complex. 4 of the units have a lien placed on them by the condo management because they are delinquent on their fees by $1000 or more. One of those units in up for auction later this month and the lien will need to be paid off for the deal to close. The owner of that unit has been living condo fee free for 2 years. Apparently there's no way to get that money except to put a lien on the place and wait for it to transfer ownership.

 

[Birdie Num Nums]

Sounds very nice. IMO, the goal is not to live as cheaply as we can, but as pleasantly as we can at a price we feel OK about.

Pravda, pravda, that is true. To me, that is the American Dream.

Apartment.... er:

Condo living isn't worse or better than living in a house; it's just different. The lock and leave aspect is great, as is the shared maintenance (from my POV). But you have to understand that you are living in a community, a tight neighbourhood. If you play drums all night, have wild parties, and want to paint your patio purple, a condo is not for you. If you are intolerant of the sound of children playing, choose an adult community.

 

[jfn111]

I'll throw my 2¢ in as a Realtor. I've sold several condo's and each time I have the prospective buyer knock on a couple of doors and talk to the current owners.
I'll also talk to the HOA president, or mgt. company and find out how many units are rentals. (Rental comes up a lot if the buyer doesn't plan on staying long term they then have options to rent the unit if they can't get a quick sale.)
Always ask for the most recent financials to see how much they are spending and what the reserves are. Nobody likes a big dollar surprise shortly after moving in.

 

[ExFlyBoy5]

Well, another very negative review of condo ownership was posted on the Living Stingy blog today: Living Stingy basically he argues- in regards to that Florida situation to which I referred in my earlier post -that it applies to ALL condos everywhere:
"How can you avoid such a financial fiasco? Well, to begin with, Never buy a Condo! As I noted in that posting, you are not buying real property, just the right to occupy. And you are not buying control of your property, just membership in a half-assed and poorly run corporation. You have little in the way of rights and a lot in the way of responsibilities. Free-standing properties are always a better value as a result."


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I would take what the Living Stingy blog guy has to say with a grain of salt. Don't get me wrong...I enjoy his blog and have read about 1/2 of it (which is quite a bit), but I *really* think he's a "glass half empty" kind of guy. So, although he brings up lots of negatives, he didn't talk about the positives.

 

[ERzeal]

+1 the Living Stingy guy (Robert Platt Bell) often has some good points, but he rants a bit and doesn't appear to have always done a lot of solid, objective research. He is pretty upfront that his options are just that....his opinions. Do your own research.


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[robertf57]

Well, I hear all the negative comments here regarding condo living, but I have to say I love my condo. The building is part of a small 3 building development with some retail space on the bottom floors and residences on the floors above. I live in a corner penthouse with mountain views, wrap around balconies and 3,000+ sq ft of living space. I bought it as a short sale when the market crashed (Otherwise I couldn't afford to be in the building!).

The HOA is run in a very democratic manner and no SFH can give me what I have here.... Walk to restaurants and bars and anything else in a vibrant part of town. Access controlled parking. Private pool and spa with fireplaces and grill with no exterior maintenance for me. Lock and leave. It is really about life style choices and checking out the place before you dive in.

 

[Sunset]

While I early pointed out the problems or potential problems with condos, I have experienced where they are good or even wonderful.
Before I mention it, the financial documents (reserve fund, expected repair plan, etc) is in many places called the [SIZE=-1]Estoppel certificate (I think).

I did at one time purchase a condo apartment building about 250 units in 12 stories. It was convenient to lots of stuff, had a pool, weight room, hobby room, etc.
The important part was it had a healthy reserve fund, the board members actually ran the place vs hiring a management company (which takes 10-15 off the top, and who knows the side deals).
I also volunteered for a committee of the board, as that allowed me to work with board members and to my delight there were no big problems.

Being involved like running for the board, or helping out, gets a person the inside scoop and helps to influence decisions. It's much better than whining about the repairs/condo fee but not even showing up at the annual meetings.
[/SIZE]

 

[sheehs1]

I meant to write EIFS. EIFS Facts BSD-146: EIFS - Problems and Solutions — Building Science Information

I ditto the EIFS (stucco) concern. Many builders on the coast of Virginia used it and it either wasn't done properly or never should have been used in coastal areas. My mother's 1,200 sf bay front condo was EIFS. When I sold it out of her trust, I had to allow the buyer $25,000 for the expected assessment. Water traveled behind the stucco, was rotting out the balconies, balconies were basically condemned, etc. Within a couple of years, balconies shored up and the entire facade of all units redone with hardy plank.

 

[heeyy_joe]

Whatever is on your checklist, building condition, reserves available, annual budget, and delinquencies need to be near the top of your list. In many States it is easy enough to check the tax roles to determine % of homesteaders and can lead to other info such as tax delinquencies - sometimes you can also (with a little more research) collect the relative age(s) of the owners.

Be aware that it usually takes 2/3 of owners to agree on changes, including capital improvements. Many older residents resist improvements such as adding an area for bicycle storage or adding a shared common element such as a BBQ grill/patio.

There are plenty of places that offer great condo living, you just have to have a good checklist and ask a lot of questions. Personally, I was originally attracted to low monthly fees, but when looking at units quickly realized that to a large extent higher fees often results in better condition, better reserves, and sometimes even better neighbors.

Or, I just got lucky with the 50 unit building I bought into...