Am I being an unreasonable first time buyer (Chicago, Normal: HOA, condominium)

[ChicagoGuy37]

I am currently in the attorney review stage of escrow on a condo. I am having issue with the seller over a couple of items. Am I being an unreasonable jerk?


1) The only major item on the inspection was that all of the valves didn't consistently fire on the furnace which caused it to shut down. The inspector tried several times, but only once did all five burners work. Our request to repair mentioned that we would like it inspected and repaired/certified to be in proper working condition. They took a week to respond and countered with a $250 credit at closing and did not mention repair. We responded again that we want it inspected/repaired and certified to be in proper working condition. Again, it took a week. They respond that they've had an HVAC tech out to see the AC/furnace (even though the AC was never mentioned by us or in the inspection.) The receipt attached only mentions inspection, but on the breakdown the tech mentions the gas valve is sticking and that he provided a quote to the seller. They didn't get it fixed, nor did they even provide us with the quote they received. I want at least to see the quote.


2) The HOA only has $10K in reserves and $13K in a separate account. There are 13 units. The HOA revenue for each year is $45K. The budgeted cost for the year is $23K, which means they are putting nearly 50% aside for reserves. So...why is there only $10K in reserves ($23K total?) In the HOA meeting minutes they've provided (only going back to 2016) there is no mention of any large costs hitting, ie roof, decking. There is however, a comment that half of the decking needs to be repaired/replaced (possibly due to city code violation) and the cost estimate they had is about $30K to $50K. I don't want to walk into a situation where I'm immediately forced to pay a special assessment, which in this case could be about $4K. My attorney has requested additional info about why the reserves are low and what they've spent on major items in the last five years, which of course, is just delaying this further.


Am I being nitpicky? If you've bought before, would you not even give this a second's concern?

[cfbs2691]

Your not being nitpicky IMO.
It seems the sellers are hiding things.

[HollyhockGarden]

My goodness! This is called doing your homework!!! As to the special assessment, if you take this condo, I would plan on receiving a special assessment bill. Just do the math -- there is not enough money there for this major repair, or for others that may pop up in the future. In fact, since this is a smaller building with only 13 units, all special assessments will be higher since you can only divide the work by 13 units. And fees are usually assessed by size of the unit. By all means, the furnace needs to be fixed. I think a certified HVAC person working for a licensed contractor should be okay - HVAC stands for heating, ventilation, air conditioning, but I am not a lawyer! Tread carefully!!!

[chet everett]

There is a wide range between being overly nit-picky and a seller trying to hide things. So far the OP has not really provided evidence of either extreme.

It is not at all uncommon for HVAC inspections / repairs to take a week and given that it is now the season for AC and not heating it is not at unusual for a technician to assume that the buyers would prioritize the operation of the AC with an inspection. It might not be a bad idea to ask the seller how much the "gas valve replacement" quoted was but it generally involves parts of between $90 and $200 as well as about an hour of labor so this should not be any kind of budget busting deal breaker.

As far as the questions about the difference between what is the reserves account vs the "separate account" and "revenues" vs "budgeted cost" not enough details have been posted. Are unit owners current in paying their assessments? Were there any funds left over from the developer? Has the board ever had an audit? Get the answers from those questions if you really care about the details. What sorts of issues are there with the "decking"? Is there any OFFICIAL correspondence from the the city? Lots of folks casually mention something at HOA meetings without knowing what the details mean and you can't rely on any such info. You may be worrying too much as the requirements of Illinois condo laws do require the seller and condo board to disclose anything that is PLANNED for the current year's expenses or budgeted for the next two successive years but beyond that who knows what might come up -- 765*ILCS*605/**Condominium Property Act. Your attorney seems like they "know the drill" by asking for more details and if the attorney signs off on what is provided by the condo I would abide with their decision -- far better to rely on somebody that you are PAYING than me or any other randomn kooks on the internet!

[ToriaT]

The questions you ask are pretty standard. Normally the seller will fix the furnace or give a credit. You have to decide what to do. If you get the credit and get it fixed yourself then you know it will be done to your liking.

Regarding the reserves and special assessments I think it is wise to ask as many questions about this as possible so you go into it with your eyes open. Most people do check into these things.

[knitgirl]

Just as an fyi: I work in the mortgage industry, and repair credits are not acceptable. It would need to be a closing cost credit and you'll need a written addendum to the contract.

[ToriaT]

Regarding closing cost credit, I just sold a townhouse that had a bunch of small niggling things wrong so the buyer got a 3K closing cost credit so she could repair them herself. I thought it was money well spent. costs to repair and time spent getting estimates and waiting for repair men is a hassle.

[damba]

Originally Posted by ChicagoGuy37

Am I being nitpicky? If you've bought before, would you not even give this a second's concern?

Only a little regarding the furnace repair. That's a nominal cost. Unless it's already *way* past it's normal lifespan, I wouldn't worry too much about it.

Truthfully though, IMNSHO people should always go into a condo purchase with $ set aside for major repairs to go towards special assessments. Just another budget item to take into consideration. $5K is reasonable IME.