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THE INS AND OUTS OF CONDO’S AND PLANNED UNIT DEVELOPMENTS (PUDS)

CONDO’S

Purchasing a condominium differs in many ways from buying a free-standing single-family residence. When you buy a condo you purchase the unit in which you live along with a shared interest in the condo association’s common areas. Examples of common areas would be; parking areas, roof, exterior walls, recreation areas and so on. Also, as an owner and member of the condo association, you pay a fee for items such as maintenance, repairs, any mortgages on the building, accounting and legal services. You are required to maintain the interior or your unit as it affects the value of the whole. The exterior of the building is owned in common and is maintained by the association.

Depending on the type of building in which you buy, there are some other things to take into consideration before you make the decision to purchase.

Association Fees/Dues: Association fees, or dues, as they are sometimes called, are charged to pay for future repairs your building may require and to pay for amenities the building offers. While you may not wish to make use of the amenities you will still be responsible for your share of their upkeep.

Maintenance Fees: Many buildings have regular maintenance personnel on staff to take care of the regular upkeep and repairs. You will be responsible for your share of these expenses. The positive side is that there is someone to make your repairs in your unit without your having to take a day off from work.

Neighbors: You are much closer to your neighbors in a condo or townhouse which may or may not appeal to you. If possible, try to meet the people in the units closest to yours before making your decision.

Personal Freedom: Some condo’s have certain prohibitions regarding what you are able to do inside your unit. They may prohibit pets or home based business. Be sure to read all of the by-laws, covenants and restrictions before making an offer on any condo, co-op or townhouse.

Storage: Storage us usually a limited commodity in condo’s. They may or may not have storage lockers or closets. This is another question to ask before you make an offer.

Security: Many condo’s provide 24 hour doorman or concierge service. These, plus your proximity to your neighbors may give you an added sense of security.

Amenities: Swimming pools, workout rooms, party rooms are amenities that would be costly or high-maintenance in a single-family home situation.

Outside Areas: Yards or your own personal outside areas are usually smaller in condos if they exist at all. If you like to do a lot of outdoor entertaining or gardening this situation may not be right for you. On the other hand, if you have no desire to shovel snow or pull weeds a condo situation could work.

Resale: Re-selling your unit will be dependent to some extent on what your fellow owners are selling for. There is more room for individuality and increasing the value of your property in a single-family situation.

PLANNED UNIT DEVELOPMENTS (PUDS)

As a unit owner in a Planned Unit Development you purchase a unit and the footprint of land on which your unit is situated and are responsible for maintaining the interior of the unit. You may also be responsible for exterior maintenance. However the association may control landscaping of the exterior. You will have to read the Declaration of Covenants and Conditions and By-Laws of your particular association. You will also have to read the Articles of Incorporation for a full understanding of your particular association as rules and regulations will vary.

QUESTIONS TO ASK OF CONDO AND PUD ASSOCIATIONS

1. Ask for copies of by-laws, covenants and restrictions. Read and have your attorney review them to see if you can live within the rules and regulations. These documents will also tell you whether or not you have the right to rent out your unit.

2. Find out what percentage of units of owner-occupied. Owner-occupied units are better cared for.

3. Compare assessment rates with other condos in the area. Are the rates about the same? Are the funds being invested wisely and will they cover inflated repair costs down the road? Is there more than one association involved to which assessments must be paid?

4. Have there been any special assessments by the association in the past few years? Special assessments mean the association was taken by surprise by an expense and the owners had to come up with funds to cover the expense. Sometime these expenses are unavoidable. Too many within a period of 4 to 5 years is a sign that there is either something structurally wrong with the building or that the assessment is insufficient to cover regular maintenance and repairs.

5. Is the building or association involved in a lawsuit? Suits involving the building or association could cost you money down the road.

6. What is the turnover rate in the building? Too many sales in the building in the recent past could be your clue to potential problems.

7. Look at the building inside and out. Are the windows new or will they have to be replaced soon – at your expense? The same holds true for interior and exterior walls.

8. If the building is a new construction or conversion from a different use ask what other projects the builder has been involved in. Check them out. If possible, speak with owners of units in those buildings. Are they satisfied with their homes?