Things You Should Know About Owning a Condominium
Welcome to the possibility of Condominium homeownership! I’m Cherie Lang, owner of the Bellevue Block and Associate Broker with Windermere Real Estate in Bellevue. I am also a Condominium owner and live in the wonderful Lincoln Tower perched above the Westin Hotel. I love it!
Here are some frequently asked questions and answers that I hope you find helpful.
What is a condominium and how does it differ from a Planned Unit Development (PUD) and a Co-op?
Explain how Condominiums are governed?
Am I a good candidate for condominium homeownership?
I have a pet, how does that work?
As a condominium homeowner, what kind of financial obligations will I experience?
Do I need a standard Homeowner’s insurance policy?
I’m considering buying a brand-new building? Anything special to know?
Do I need to be concerned about noise?
Do you have any further information I might find helpful before purchasing a condo?
What is a condominium and how does it differ from a Planned Unit Development (PUD) and a Co-op?
Condominium: Residential development, individual unit ownership, joint ownership of land and the common areas.
PUD: individual ownership of unit and the land, common areas owned by Homeowner Association.
Co-op: Own a share in a corporation. Corporation leases the apartment to the owner
Explain how Condominiums are governed?
Condos are governed by the homeowner’s association which is comprised of all of the owners who then elect a board of directors. The Directors have the power to set and enforce rules. Also condos must abide by specific state laws and documents called covenants, conditions and restrictions that specify responsibilities, rules and rights.
Am I a good candidate for condominium homeownership?
If you’re looking to have a convenient lifestyle where exterior painting and yards are eliminated, and in most cases your exterior windows washed, you’re going to love it! Most condominiums offer excellent locations to shopping, dining, museums, theatre, movies, groceries, parks and so much more!
I have a pet, how does that work?
Most pets are welcome in condominiums. In fact, some of the newer ones right here in Bellevue are creating spaces where your animal can play and have designated “relief” areas. I see all kinds of pets in the elevator from tiny yorkies to large german shepherds.
The covenants, conditions and restrictions will be beneficial in determining which complex bet suits you and your pet’s needs.
As a condominium homeowner, what kind of financial obligations will I experience?
You will pay your mortgage and property taxes on your private unit. You will also pay a regular monthly assessment. These assessments are usually based upon the square footage of your unit and cover your common expenses like insurance, management fees, taxes on the common areas as well as minor maintenance costs. Usually it also covers many of your utilities. It’s common for a portion of the dues to be placed into a reserve account which is the association’s savings to pay for any unforeseen maintenance and repairs that might come up. On occasion, an association may also levy a one-time assessment to cover a large, unscheduled repair or cover shortages that may occur in the reserve account.
Can you be more specific about the reserve account and the special assessments, I don’t want to walk into something that will cause financial stress!
A reserve account is for your benefit as a condominium homeowner and each month a portion of your dues is set aside for unforeseen repairs. Special assessments occur more often in older buildings that may not have been properly managed and now have necessary repairs that need tending to.
How can I be sure that I am purchasing in a complex that has a good homeowner association that has adequate reserves so as to avoid special assessments?
When you are purchasing a previously owned condominium, the law requires that you receive what’s called a resale certificate. It provides you with the condo’s covenants, conditions and restrictions (CC&R’s), a financial audit from the previous year (done by a CPA should the complex have 50 or more units) up-to-date financial statement as well as the minutes from the annual homeowners’ and board’s meetings. You can certainly request more than one year’s worth of meeting minutes. Studying the minutes may divulge any special assessments being considered. However, by law the seller does not have to divulge one until formally receiving board approval. You can also attend a meeting if you’d like a chance to see how the board operates.
Do I need a standard Homeowner’s insurance policy?
You are covered by a master policy which the association purchases to insure the entire complex. The homeowner then purchases insurance to cover their own private belongings. There are three types of master policies as follows:
- “Bare Walls" which is the least expensive and only insures the shell of the building
- “Single entity” which covers everything originally installed by the builder
- “All-in” policy which is the most expensive, most desirable as it insures everything that cannot be put in a moving van.
I’m considering buying a brand-new building? Anything special to know?
A public offering statement is provided to you and is required by law. You’ll find contents about the developer, any pending lawsuits, and the building’s structural standard as well as proposed CC & R’s.
Do I need to be concerned about noise?
I’m amazed at how quiet my unit is. However, you’ll want to be your own judge when considering your purchase. There may be obvious locations that could bring more noise than others, i.e. lower level next to a street, proximity to heavy traffic, etc. It’s believed by some experts that a 6-inch concrete floor system is quieter than wood construction. The walls between units ideally will be staggered-stud, double wall-construction with some insulation between them. Outlets on walls will be staggered as well so that they are not a back-to-back sound transmitter between units.
Do you have any further information I might find helpful before purchasing a condo?
Yes, call me and my team of experts. We are familiar with condominiums and we will lead you in your research! Here are just a few of the items we will help you navigate:
- If this is a new unit, what are the terms and how is my earnest money handled?
- Are there professional financial audits done on your proposed complex and how often?
- Do any lawsuits or special assessments exist or are any being contemplated?
- What’s the ratio of renters allowed in the building? Sometimes this will affect your financing options. See our financing options listed under Wells Fargo
- Are there any owners delinquent with dues? Ask for a percentage, any over 5% could pose a problem
- Is parking included and where might visiting guests park?
- Research the developer and architects and their reputations.
- For new condos, find out if the building has had a building envelope integrity survey. This looks for hidden construction problems
- Get a home inspection
- Find out what kind of a system is used for water intrusion for the structure.
- What kind of master insurance policy does the association have so I know how much to purchase to adequately cover myself in my own unit?
