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For those who have purchased condos what documents did you request before purchase?
I know of
1. Financials(What is this document called)
What did you look for in these? I know reserves is a big one. But how do I measure this? Obviously they need to cover capital expendiures, but how do do I estimate this.
Percentage of teh value of all the units?
Percentage of dues?
2. CCRS
Do I also need the insurance details? I know this is big for getting a loan?
When do I get this information? Before the home inspection?
These Docs come after the offer is accepted from the seller. You only have so many days to accept the findings per your real estate contract.
Financing: Super important with regards to condo documents. I am not sure what state you are making the purchase in. If you are buying in Florida-anywhere in FL- that budget for the condo association is very important with regards to how much $$ you have to put down as a downpayment. The association needs to have a minimum of 10% reserves and be Fannie Mae approved if you are planning to put less than 25% down. **Budget is very important** Also are they any upcoming assessments to the building that you are going to inherit? Some buildings can pack a huge assessment. I have a condo unit I am listing with a 25K assessment to each unit. No Kidding!
Insurance: Once again important for financing, esp in FL.
Regulations and Minutes for the last 2 association meetings (or as many as you can get). You want to see if they enforce their restrictions and if the board can actually make decisions & do they get along with each other? Most people don't read the minutes of the meetings. I would. You can also see in the minutes if they are discussing any upcoming assessments.
Do not forget a copy of the Bylaws plus Rules and Regulations in addition to the Covenants.
An Estoppel Certificate from the association. This will contain information with respect to the common expenses and obligations that the current owner is responsible for. It also outlines any existing HOA balances and violations on the home.
Check your state law and see what the association has to give you. We give all of the info other posters have mentioned and more. You state may not require the same as other states. If they are not required to give you something, and you would like to have it, just ask.
If any information, after an accepted offer, is refused it's a big red flag.
Some states have good laws already in place regarding getting the documents, with a max time frame, how long to look at them, whether the contract is really in full force until you let it be known they are acceptable and the contents of the documents.
In some states, this is referred to as the "Resale Package" and should include bylaws, rules and regulations, covenants, the budget, a reserve study (and the replacement reserve budget), recent meeting minutes and information about any litigation the association may be involved in and any upcoming additional assessments that may be coming down the pipe. The selling agent *should* order that package and it generally takes up to 2 weeks to receive. Then you have a specific amount of time for review (3 days in VA).
In addition, the lender will request for the condo association to complete a specific document that they need to verify that they can fund the loan. This will include info like owner occupancy rates, debt, etc...
Any condo that has a huge 25k assessment like the one mentioned above sounds poorly run. Generally, assessments are only used when not enough money is being set aside in the reserve fund. A huge no-no.
Any condo that has a huge 25k assessment like the one mentioned above sounds poorly run. Generally, assessments are only used when not enough money is being set aside in the reserve fund. A huge no-no.
Not necessarily. For instance, concrete restoration has not traditionally been a reserve item in many associations and when time comes individual unit assessments can easily run to five figures. This may not be an issue in non-coastal areas.
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Condo Docs
