You might think buying a condo is easy
Many people believe buying a condominium (condo) may be easier than purchasing a single-family home. You may be surprised at the number of things you have to keep in mind when purchasing a condo. Aside from your typical home inspection, here are a few important areas of interest when you buy a condo:
Maintenance Fees – What do they include (e.g., electricity, A/C, etc.)? Are the maintenance fees going to increase?
Parking Stalls – Make sure you physically look at the parking stall(s) included with the sale and that the parking stall(s) advertised as “included with the unit†are the actual parking stalls legally conveyed with the unit. Are the parking stalls compact or regular sized, side-by-side or tandem, covered or uncovered, close to the elevators or far away?
Termites – Eradicating termites from kitchen and bathroom cabinets can be a very diffi cult and expensive process. Additionally, if the cabinets have to be replaced, it can get very costly.
Assessments – Typically, an assessment can be charged by the condo association to the individual owners to cover the cost of major repairs/replacements that have not been adequately budgeted for. Whether it be a lump sum or monthly assessments, this can signifi cantly increase the cost of owning a condo. A prospective condo buyer should check for both existing and potential future assessments.
Association Loan – Often, the individual owners in a building cannot afford to pay a lump sum assessment. In these cases, it is common for condo associations to take out an association loan to cover the cost of the repair/replacements for the building. These loans will be paid off over time via increased maintenance fees paid by the individual unit owners. As with assessments, a prospective condo buyer should check for both existing and potential future association loans.
Pet Policy – If you have pets or are allergic to pets, it is critical that you understand the building’s pet policy.
Litigation – It is important to know whether the building is involved in current or future litigation, as litigation may result in a potential future cost to the condo association which will eventually fi lter down to the individual owners in increased maintenance fees or special assessments. Litigation can also provide insight into current and future problems with the building.
Adequacy of Reserves – Condo associations are required to produce a reserve study to ensure that the current maintenance fees minus expenses are adequate to fund future improvements or repairs to the building. Inadequate reserves can lead to higher maintenance fees, assessments and association loans.
Storage – If storage comes with the unit, it is important to verify the location of the storage and to ensure that use of the storage will transfer to a new owner.
Air Conditioning – If the building has central air conditioning, what components of the air conditioning system are covered by the building, and what components are covered by the individual owners. Replacement of air conditioning units can be very costly.
Association approval for improvements – It is important to ensure that any significant improvements to the unit are allowed by the house rules, declarations and bylaws of the condo association and have the necessary condo association approvals. Otherwise, the association can ask the unit owner to remove the improvements.
These are just a few items that you may want to keep in mind as you make a decision to purchase a condo. As you can see, purchasing a condo may not be as simple as it seems.
MYRON N. KIRIU
Realtor, Owner, CEO
Better Homes and Gardens Real Estate Advantage Realty
CONTACT 808-864-9000
EMAIL myrink@betterhawaii.com
WEB myronkiriu.com
