When purchasing a condo, know that you are not just buying a unit, but you are buying into a community, building, and complex facilities as well. As such it is imperative to review the condo association documents to know what you are purchasing. Condo documents include declarations and bylaws, rules and regulations, current association budget, meeting minutes, and any disclosures. From these documents you should be able to determine the following:
Association Financial Stability: Review the budget carefully to see if there is a healthy funding for capital expenditures (such as roof replacement) and deferred maintenance (at least 10% of the budgeted income should be put towards the reserves), and insurance.
Meeting Minutes: Look over the meeting minutes of the last few meetings to get a sense of what are the pressing issues are of the association.
Percentage of renters: If the complex has more than 50% renters, your mortgage may not be approved as it is viewed as a risky investment.
Management: Is the association professionally managed or self-managed? Self-managed complexes may be riskier.
Tenants: Depending on the type of loan you are considering, it may have a limit as to how many units a single entity may own. Ask if there are any multiple unit owners. This may also be important as they may have more sway in the association given their allotment of votes.
Utilities: What utilities are you responsible for?
Leasing: While you may intend to live in your home initially, it is good to know what the allowances and restrictions are regarding leasing your unit, should your circumstances change.
Moving In: Are there procedures or fees associated with moving in?
Pets: What allowances or restrictions are there regarding pets? What areas of the complex are they allowed or not allowed in?
Visitors: What allowances or restrictions are there regarding visitors? How long can they stay? How many can stay? Can they use all of the facilities?
Facilities: What is your responsibility regarding trash, recycling, driveways, landscaping, etc.?
The above is not meant to be an exhaustive list, but should help you identify information that is important to purchasing your condo. If you have any questions, please let us know.