Property Management - Owners & Associations
Advice and resources for managing your home and home owner associations
At some point in time you may live in a condominium (condo), cooperative (co-op) or a home governed by a board or association.
Homeowners' association (HOA) or Condo/Co-op Boards are legal entities created by a real estate developer for the purpose of developing, managing and selling a community of homes. It is given the authority to enforce the covenants, conditions, and restrictions (CC&Rs) and to manage the common amenities of the development. It allows the developer to end his responsibility over the community, typically by transferring ownership of the association to the homeowners after selling off a predetermined number of lots.
Selling or purchasing a condo, co-op or HOA governed home has additional complexities that single family homes or vacant land do not have.
The following are the main items that need to be handled to successfully transfer a condominium:
(1) A copy of the Declaration, by-laws, other condominium instruments and any rules and regulations.
(2) A statement of any liens, including a statement of the account of the unit setting forth the amounts of unpaid assessments and other charges due and owing as authorized and limited by the provisions of Section 9 of this Act or the condominium instruments.
(3) A statement of any capital expenditures anticipated by the unit owner's association within the current or succeeding two fiscal years.
(4) A statement of the status and amount of any reserve for replacement fund and any portion of such fund earmarked for any specified project by the Board of Managers.
(5) A copy of the statement of financial condition of the unit owner's association for the last fiscal year for which such statement is available.
(6) A statement of the status of any pending suits or judgments in which the unit owner's association is a party.
(7) A statement setting forth what insurance coverage is provided for all unit owners by the unit owner's association.
(8) A statement that any improvements or alterations made to the unit, or the limited common elements assigned thereto, by the prior unit owner are in good faith believed to be in compliance with the condominium instruments.
(9) The identity and mailing address of the principal officer of the unit owner's association or of the other officer or agent as is specifically designated to receive notices.
Make sure your Realtor has experience in assisting clients with the sale or purchase of these types of properties.
What is a Co-op (Cooperative)?
A shareholder in a co-op does not own real estate, but a share of the legal entity that does own real estate. Co-operative ownership is quite distinct from condominiums where people "own" individual units and have little say in who moves into the other units.
Each resident or resident household has membership in the co-operative association. Members have occupancy rights to a specific suite within the housing co-operative as outlined in their "occupancy agreement", or "proprietary lease" which is essentially a lease.
|The Pros and Cons of Condos
Condominiums and townhouse offer an affordable option to single-family homes in most areas. But consider these facts before you buy.
Storage: Some condos have storage lockers, but usually there are no attics or basements to hold extra belongs.
Outdoor space: Yards and outdoor areas are usually smaller in condos, so if you like to garden or entertain outdoors, this may not be a good fit. However, if you hate yard work, this may be perfect option for you.
Amenities: Many condo properties have swimming pools, fitness centers, and other facilities that would be very expensive in a single-family home.
Maintenance: Many condos have onsite maintenance personnel to care for common areas, do repairs in your unit, and let in workers when you're not home.
Security: Many condos have keyed entries and or even doormen. Plus, you'll be closer to other people in case of an emergency.
Reserve funds and association fees: Although fees generally help pay for amenities and provide savings for future repairs, you will have to pay the fees agreed to by the condo board, whether or not you're interested in the amenity.
Resale: The ease of selling your unit is more dependent on what else is for sale in your building, since units are usually fairly similar. Single-family homes are usually more individual, so even if there are others for sale in your area, they probably won't be exactly like yours.
Freedom: Although you have a vote, the rules of the condo association can affect your ability to use your property. For example, some condos prohibit home-based businesses. Others prohibit pets. Read the covenants, restrictions, and bylaws of the condo carefully before you make an offer.
Proximity: You're much closer to your neighbors in a condo or town home. Look at profile of other owners be sure you'll be comfortable. If possible, try to meet your closest prospective neighbors.