5 Things You Need to Know Before Buying Your First Condo

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If you’re thinking about buying a condominium you’ll find there are many upsides to condo ownership. You often have access to resort-style amenities, a lower upfront cost-of-ownership, and fewer responsibilities than you would have in a single-family home. But at the same time, there are probably a few aspects of condo ownership that may very well surprise you.

Before you commit to the condominium life, here are five things that you absolutely need to know about living in a condo community:

  1. Lack of Control

Living in a condo means that you’re going to have fewer responsibilities. You no longer have to worry about fixing the roof if it leaks or needs replacement. Your hazard insurance payments are covered by your monthly condominium dues. The pool and the lawn and the painting of the outside of the unit are not your problem anymore.

But for some people that lack of control may become a problem. While you may not have to worry about routine maintenance, you also won’t have much of a say in planned repairs and upgrades — or in the timeline for completing them. The same thing goes for community-wide regulations and restrictions, such as how you can decorate your unit’s exterior or how and when common area amenities may be used.

Being part of Condo Owners Association (COA) means that most aspects of the property will be governed through the general consensus of all owners. Typically, those who are active in the group’s leadership will have most of the say in matters that govern the condo’s rules and regulations.

Of course, as an owner you will have the opportunity to run for office in the association; you’ll also have opportunity to share your views at COA meetings. But even if you’re the president of the association, you will not have the full control over your property that owning a single-family property can grant you.

  1. Monthly COA Fees

Some communities of single-family homes may charge very low HOA fees Occasionally you’ll find a single family community with no fees at all. However, if you live in a condominium you can count on paying association fees every month that you own your unit. These fees are help keep the building well-maintained and in good repair; your monthly fee pays for all necessary maintenance and improvements. Funds are also allocated to long-term projects, as well as put into reserve for unexpected expenses down the road.

In addition, your condo association dues pay your hazard insurance. In a single family home, you pay for this on your own every month. In a condo it’s part of the fee, as is room maintenance and repair.

Depending on the building, monthly condo fees can range from a couple of hundred dollars to sometimes in excess of a thousand dollars a month. Although a few properties may charge a flat rate to all residents, most associations divide the expenses proportionately based on each unit’s size. Some even differentiate costs based on a unit’s view and which floor it’s on. By-and-large, you can expect to pay higher monthly dues on a 4-bedroom penthouse than you would a studio unit on the ground floor.

You can also expect to pay much higher dues when your condo is situated on the ocean or the intracoastal. That’s because insurance payments are higher when property is near water.

  1. Special Assessments

Sometimes, monthly COA fees just aren’t enough to cover all of a building’s expenses. That’s when a special assessment is levied on all condo owners. This usually comes about because the association’s reserve fund has not collected enough money to cover unexpected repairs, or improperly deferred maintenance. Sometimes, and it’s a good idea to check this before you purchase, the association is simply guilty of poor budget practices.

These one-time special assessments are generally earmarked for a specific project. They can range anywhere from a few hundred dollars to a few thousand dollars, depending on the number of contributing owners and the scope of the work to be completed.

To protect their buyers from unanticipated liabilities, many Realtors include language in their condo contracts that asks sellers to be responsible for any assessments within six to twelve months of closing.

  1. The Balance Sheet

You’d probably be cautious about investing your savings in a company with a questionable financial foundation. By that same token, you should be equally concerned with the finances of the building in which you’re planning to purchase a new home.

Fortunately, Florida Statute 718.503 requires that sellers provide prospective buyers with an assortment of information related to the condo association, including community by-laws, expected operating expenses, and the current balance sheet.

You should carefully read through all of the documentation that you’re given. But you should make sure to pay special attention to the balance sheet- particularly the amount of available cash that the COA has stashed in reserve.

Newer buildings can expect to face fewer large repairs during their first 10 years of operation. If they are well run, this is their chance to accumulate the reserves they will need to meet future needs. Well managed older condos try to have a reserve on hand in case of unexpected repairs. In many cases, banks are reluctant to lend at less than a 60–40 loan to value (LTV) unless a building maintains at least a 10% reserve.

  1. Pet Restrictions

While it’s difficult to imagine something as significant as a condo purchase being derailed by a four-legged companion, cats and dogs often get in the way of condo sales. That’s because a very high percentage of condos discourage pets of any kind. (There’s an easy and very legal way around this. See my blog “Don’t make a move without your pet.”)

When pets are allowed, condo associations often take a strict stance on the size and breed of animals that owners can have in their units. In some cases, there may be a ban on certain specials — i.e. no dogs or exotic animals — whereas other times there may be specific breeds mentioned, such as Rottweilers, Dobermans, or Pit Bulls. Another common way in which COAs restrict pet ownership is by limiting the maximum allowed weight limit. Some may limit pets to less than 20 pounds, but there are many pet friendly buildings that welcome 1–2 or even 3 pets of 50 pounds or more.

Any questions on condos? Please call me at 561–213–6139.

Marc Jablon

New Harbor Realty




Written by

A South Florida Realtor from New Harbor Realty helping you to buy and/or sell your home. Here to help give you tips and tricks about real estate.

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