Condo Purchase – I Am Buying A Condominium Or Town Home And Have Questions
Buying a condominium requires a thorough due diligence investigation. The condominium’s declaration should be reviewed. For new construction, you will want to review the Offering Plan. These documents are commonly called the governing documents. The last three years financial statements should also be reviewed.
Carefully reviewing these documents can take from 2 to 5 hours or more. This is where you truly get what you pay for. Our concierge practice provides a written summary of this review. This summary will serve as a quick reference for you to understand how much money the association has in its reserve fund to pay for emergency or necessary repairs. It will also tell you whether you can change your windows yourself or barbecue on the balcony, as well as address specific items that may be important to you.
We perform our review only after speaking with you. We cannot address your concerns if we are not aware of your concerns. For example, a client recently wanted to know about emergency protections on a new condominium being built in Chelsea. Our summary reviewed the generator, emergency pumps, and other measures the developer would use to address future weather occurrences such as hurricanes.
Our review will address planned “special assessments”, as well determine what the current reserve fund balance is and the approximate monthly operating expenses of the association. Assessments are always possible. If a reserve fund is less than 10% of the association’s annual budget, an assessment is definitely more probable than it would be at a similar building that has 50% of its annual budget in a reserve fund.
Reserve balances are important if you are planning on applying for a mortgage. A condo association that has 5% reserves may scare off many lenders. The reason is both simple and practical. If the roof is blown off in a storm, the repair might be delayed until after the insurance company issues the check. A well-funded association can contract for immediate repairs. They can pay for such repairs from their reserve fund.
Generally, board approval is not required. The condominium will typically have a right of first refusal. Any person planning on selling their unit typically must apply for a waiver of right of first refusal. This helps the association protect the value of all units. A disgruntled unit owner could sell for less than fair market value without a right of first refusal in place.
Such a sale would artificially depress the market. All units would depreciate in value. Waivers are almost always given if the sale is for fair market value. It is simply a way for the association to review each transfer in an attempt to protect all unit owners.
Buying a condominium should be an exciting and enjoyable process. Our Platinum Property Transfer System enables busy professionals and entrepreneurs to purchase condominiums without having to address avalanches of emails and telephone calls. Our concierge practice allows you to buy your unit with minimal involvement, if you so desire. Simply put, we allow you to do what you do best. Self-employed clients often earn many times more than what our legal fee is by being free to focus on their careers or businesses.
You will receive regular updates in a systematic and organized manner that you select. Our Platinum Property Transfer System enables you to purchase real estate without even having to come to the closing. Your stress and overwhelm are eliminated.
By giving us Power of Attorney, we work with your lender, Realtor, title company, and appraiser to ensure that your property is free from any liens or municipal violations. After the closing, we email you a copy of your deed. Any unused money is refunded by return bank wire. We also provide you with copies of all closing documents in a professionally sealed binder.
John has written an e-book, Big Apple Guide to NY Real Estate Transactions. It is available to answer questions that you may still have. Please provide your first name and email in the box below to download it now. We are attorneys and not salespeople. Nobody will ever call. There is no obligation. John simply asks that you email him to tell him what you liked or did not like about the book.
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