Pros and Cons of Condominium and Townhouse Ownership
Purchasing a house is a big decision, especially if it is the first one. In today's current 2011 market, there are many options. Foreclosures and short sales are becoming all too familiar household terms, but the details surrounding them are still mysterious to the average home buyer.
Yet the terms condominiums and townhouses are well known. They bring with them visions of carefree living. However, even these terms are not fully understood for what they represent in home ownership. Often, an association fee is included, and outside maintenance is taken care of with this payment. This makes the ease of home ownership so much easier.
However, fees may increase over time if new assessments are added for special projects. If fees go up and owners get behind on their payments, the association can levy liens. With interest, some condominium owners may face foreclose or expensive court costs.
Home Owner Associations
HOAs usually have a management company that oversees operations. They often hire an office manager to mediate between their company and the Board. The Board is usually a group of home owners elected as council to determine and govern the affairs of the association. And of course, there are lawyers to represent the management company and the Board.
Rights and Responsibilities
When a buyer chooses to purchase a shared dwelling instead of a detached home, there are certain rights that are waived. The owner no longer has the same rights as that of a single family owner. Collectively, they share their home with the association. Decisions that are made by the Board, management company and the influence of the lawyers will impact the way in which a condominium or townhouse owner lives.
Because there are Bylaws and Declarations in an association, the owner of the condo can't live and make independent decisions. These documents spell out the rules and regulations of the association, and they are extensive.
There may be rules governing the ability to lease the property, what changes can be made inside and outside of the property and many other individually tailored specifications. If an owner chooses to rent her unit, she is subject to the rules and regulations put forth by the association. Should a renter not abide by the regulations, the owner will be subject to the fines (Grimm).
Research Before You Buy
Before making the final decision on a single family or attached house, research. This can be done in many ways. Find out what is covered in the association fees. See what the tenant-owner ratio is and investigate liens on properties in the desired community.
Check the financial health of the organization. See how much financial reserve is available. Do a cost analysis on repairs for a single family home versus paying association fees for repairs. Read the Bylaws and Declarations. Ask a lawyer to help you through the process and make sure that you thoroughly understand them.
Last, speak to random home owners in the neighborhood where you want to purchase your home. By taking these steps prior to making your choice, you will ensure a happy life and wallet for years to come.
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