Hi guys, I have noticed in the past few months that many of my clients are “downsizing” their properties. Whether it is due to forclosures or just down to plain wanting to save more money, many are trading their houses for more modest dwellings. A popular alternative has been condominiums. However, I have gotten many questions about moving into one as many are not used to having to pay HOA (Homeowner Association) fees, and such.

So, before you buy into a condminium, contact the condo board with the following questions I have prepared for you. In the process, you’ll learn how responsive, not to mention how organized its members, your potential neighbors, are.

1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale. Remember, the goal is to eventually move back into a house when the ecomomy gets better.

2. What covenants, conditions, and restrictions (CC&R), and bylaws govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can’t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them. And have an attorney review property docs, including the master deed, for you. Better safe than sorry, I always say.

3. How much does the association keep in reserve? How is that money being invested? If you are going to be making payments each month to a fund, you better well know what it’s being spent on. And that you are seeing some type of return in enjoyment in the form of landscaping for example. Much like your paid taxes, isn’t it?

4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs.To determine if the assessment is reasonable, compare the rate to others in the area. Most of the information is usually a phone call or email away.

5. What does and doesn’t the assessment cover? Some general things include common area maintenance, recreational facilities, trash collection, and snow removal, depending on your area.

6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy.

7. How much turnover occurs in the building? Are people coming and going constantly? Why? Did they move in just to find soemthing seriously wrong? You never know.

8. Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly. And more importantly, why are they being sued? Did they cut corners in the waste management? Or maybe they skimpped on the building materials?

9. Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren’t in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property? In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments. Find out!

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