Condo Associations
So you are thinking about buying a condo but you are not sure where to start. There are many aspects to buying condos such as what areas, how big and what condo association questions should I be asking. Condo associations were originally created as a legal entity for the purpose of developing, managing and selling the development. It allows the developer to exit the financial and legal responsibilities typically by transferring ownership to the condo owners after selling off a pre-determined number of units. Once this is done the important thing for any condo buyer to know regarding the association that will be overseeing their common property is what are the responsibilities of all involved? You are spending your hard earned money and the last thing you want to do is get stuck with a lemon or live someplace that is not what you expected.
There are a lot of condo association questions to ask before you buy but we will only cover a few.
- 1. Ask to see the condo association board meetings minutes. What have the owners been talking about, what are their concerns and issues, are there a common thread for some of the complaints, etc.
- 2. What is the renter to owner percentage? If the renter population is very high are there rental policies in place either in the bylaws or by an amendment. Always remember the association can change its bylaws so make sure you are well informed of any changes.
- 3. Ask for a copy of the certificate of insurance from the association which is a summary of the association's policy. Are the replacements costs enough to cover rebuilding if need be? Another important area to question regarding the association insurance policy is if it has a building ordinance clause. This clause insures that the building will be up to the current code if rebuilding is required.
- 4. How much is the repair fund? This will tell you if the association has the funds available for maintenance. If the fund is not high enough then the complex may not be as well kept as it should be or be living beyond its means.
- 5. Ask to see the delinquency rates of the current owners. When people do not pay their association dues on time it may be a sign of discontent and you will need to find out why.
Asking the right condo association questions is as important as finding the right real estate agent or the right financing. We all want to make sound financial decisions and the only way to accomplish this is with the right questions.
Condo Associations
Condo associations are critical to keeping a condo complex running smoothly. It’s the management team of a business. This group of five, the president, treasurer, secretary and two board members make the group up. These are the five board members known as the condo association board. It’s up to these five people to run an entire condominium complex.
Do these condo association board members get paid? Typically they do not. They are elected to the board by the condo owners too serve the term, usually a year, free of charge. This is asking a lot of these people based on the number of challenges that come their way over that year’s time. Normally after one year, there is a vote to see if they will either be re-elected or a new board will be put in place to run the condominium complex.
Condo associations make decisions on a number of things including what to renovate in the complex, what to do about a dog that constantly barks after hours and if a ceiling leaks water into another condominium. They handle calls for maintenance and look to find the best prices for all the services that need to be done to run the complex. Condo associations, just like anything in life, can make or break the organization of the development based on how much effort is put into the management end. If you have a condo association that is right on top of things, you’ll find the complex running much smoother and efficient. This is so important for the reselling of the condo. If you want to sell your condo and you have a condo association that is very efficient and keeps everything running excellently, the new buyer is going to be more attracted to your particular condo complex.
This shows you how important it is to have the right people in place running the condominium association. If you hire the wrong people, it can cost you thousands in re-sale of the condo. Though you’ve kept up your condo inside its four walls, the complex itself can show horribly. The complex may actually be kept up, but the books (financials) are in disarray causing a buy of a condo to look elsewhere. This could tremendously impact the sale of your condo and your financial future. Make sure when you buy a condo, you check everything you can about the condo association and how it’s running everything.
Condo Association Questions
There are dozens of Condo Association Questions that we could answer. Where do we begin? The condo association board is made up of five members; president, secretary, treasurer and owners of the condos. These five members are in charge of running the condo association.
When condo association questions come up it’s best to turn to a condo attorney. OwnACondo.com can recommend several condo attorneys that will help you with answers to any question that comes up. Over the years of several condo conversions, these attorneys were kept on their toes handling many disputes and arguments about who does, what and how does it all work. It’s important that the group of five that run a condo association hire a professional condo association management company to aid and help them in the running of the condo complex. Professional property management is critical to the overall success. Remember, these guys to this for a living, the five board members are usually amateurs and have full-time jobs doing something else. Bring in the professionals.
Condo association questions can be as simple as handling a “condo questionnaire†for a potential new buyer of a condominium, to handling a dispute between two condo owners. All condo association questions start by contacting the board members. If they cannot find an answer, it then gets passed on to a condo attorney. Most condo associations have a few attorneys to turn. If you cannot get your dispute handled by the condo board, you may need to get attorney representation yourself.
In the end, one way or another, the condo association board, the professional management company, the association’s attorney or your own representation will find a way to end the question or dispute. These are very much worse case scenarios and almost never happen. Most questions that come up for condo associations can normally be handled right away because, most likely, it was something that happened in the past and there’s a reference for it.
Don’t loose sleep over Condo Association Questions that can’t be handled right away. In the end, these things or problems all have a way or working themselves out. For additional questions on condo management, seek the advice of RE Management.com for any of your condo management questions.
Condo Associations
How important are “Condo Associations†when buying into a condo complex? Extremely, and you better do your homework before going forward on that condo purchase. A well run condo association can mean the difference of thousands of dollars to you. How is that possible?
A condo association is basically a manager of a business. There are business owners that are different and better than others. The same with a condo association. If an association running condos is efficient and knows what they are doing, they’ll make the life of the condo owner so much better. Let me give you a few examples.
Let’s say that a condo association president takes on the position but decides not to produce results. He sits back and does not pay attention. The roof starts leaking and he hesitates too long and what normally would have been a repair for the condo complex, turns into the need for a brand new roof. He goes to the reserve fund and realizes there’s not enough in the fund because the budget was not set up properly. Who has to pay for the new roof? Everyone owning a condominium in that complex would have to pay. If you own 3% of the complex based on the size of your unit, you’ll pay 3% of the roof. This is what is known as a special assessment.
Special assessments are mainly due to mismanagement of a condo complex. If the condo association was run right, there should be no need ever for a special assessment. When a complex is turned into condos from apartments known as condo conversion or when a new constructed condo complex is built, the condo association is put in place. This is the time when all the budgets are put together reviewing what the expected expenses are going to be for the complex. Will expenses increase over time? Of course they will. So there will have to be increases along the way. Too many condo associations, when setting u the books and numbers in the beginning of initiating a condo association, fail to plan for all the “what ifsâ€. It’s extremely important to budget fpr everything that could go wrong. If there is a large surplus of funds in the association account, there can always be a return of capital.
Condo associations can really make or break the sale of your condo when it comes time to exit as well. Imagine trying to sell your condo to an individual when there’s a special assessment of thousands of dollars on your unit because of a mismanaged association. Beware and do your homework before buying a condo!
Condo Management Chicago
If you currently live in a Chicago condo and you are looking for a management company than look no further than RE Management, a sister company of OwnACondo.com. OwnACondo.com is the best place to buy and sell condos and RE Management is the best Condo Management Chicago has to offer! When we began converting apartments to condominiums in mid-1990’s we also management the associations in many of the projects, long after the conversions were completed. To be the best Condo Management Chicago has to offer we provide services and benefits that many other condo management companies do not provide, and we work with the association officers to make your condominium communities a great place to call home.
We are not your typical condo management company. We know you worked hard to get your condominium and you want to keep it a great environment that you enjoy coming home to and with RE Management we can take many of the worries of condo management out of the picture. Some of the condo management benefits that RE Management has to offer are:
1-We do the collection of monthly assessments of all units
2-We pay the association bills in a timely manner
3-We efficient and effectively handle the work orders for the premises
4-We work closely with the condominium association officers to evaluation of utilities and other expenses and offer cost saving suggestions
5-We do an annual re-evaluation of expenses and income to provide the best condo management Chicago has to offer
We understand today’s economy and we not only look to save money on our own expenses, but we look for ways to save our clients money too! We pride ourselves in working closely with the condominium association officers to resolve issues quickly and effectively. We keep communication lines open not only with the condo association officers but with the residents and owners as well. We understand the importance of keeping informed of important issues. It is our experience that a happy association makes the condominium environment a better place to come home to.
So do not wait a minute longer, call the best Condo Management Chicago has to offer, call RE Management today and let us start working for your condominium association. As 2009 started, a new attitude started as well, to make 2009 better than any of the years of the past. So take the worries out of condominium management and let us work together. Together we can do many great things!
