Do not go rushing off to purchase the minute you`ve discovered your dream condo. There are some issues you need to think about prior to buying a condominium, so do your research first. If you do not give it some thought and rush into the transaction, you can be making a severe mistake.
Scrutinize the transcript of the condo association board meetings to find out what kind of complaints condo proprietors have made. When there are a lot of complaints regarding the plumbing or the state of the backyard, it will be possible to evaluate the efficiency of the condominium administration. Even if you do not discover many complaints, reading the minutes gives you a great handle on the kind of projects that are being planned and which the vendor might not have really informed you about.
See whether you can get information about the type of delinquency rates which are prevailing among the condominium proprietors regarding payment. If owners usually are not paying out their dues to the association when they fall due, this could be a sign of their dissatisfaction with the state of affairs. It might likewise signal a squeeze on association funds because of the non-payment.
Find out if the reserve fund has been audited in the previous few years. Lester Giese, a popular professional on real estate, says that when the condominium is fewer than ten years old, the reserve fund should hold ten percent of the cost of the assets that should be changed (such as roads and roofs). This must be about 25% for structures between the ages of 10 and 20 years and 50% for condominiums which are over 20 years old. If the maintenance costs are unrealistically small, the residents might be glad, but there is a good chance that the building has not been well maintained.
Ask for and study a duplicate of the certificate of insurance, which will contain a summary of the insurance policy taken out by the association. The insurance should be sufficient to cover the costs of rebuilding and sufficient enough to cover the expenses of upgrading the building to the building code. This will also provide you with an idea of exactly what insurance coverage you need to take out separately on your private belongings and your personal effects that will be stored in the condominium unit. If you have difficulty in deciphering the technical jargon within the policy, bring the certificate to your insurance agent and ask for his opinion.
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