A POTENTIAL MAJOR PITFALL IN A CONDO PURCHASING PROCESS

By
Real Estate Agent with Windermere Real Estate/West Sound, Inc.

 

During the last few years we have shown and/or sold a number of condos. During the most recent two sales, in both cases we represented the buyer.

We always make it a point to atempt to keep in touch with former buyers. In each of the last two instances our buyers informed us that soon after their purchases they had been confronted with bills for "improvements" that they were unaware of being considered at the time of their purchase.

In one instance there was an indication on the title that there was a suit being brought by the homeowners association against the builder because of defects in the outside wall of what was a relatively new seven story condo in Seattle. In that instance the buyer did purchase the unit even though the outcome of the suit was unknown at that time. However the settlement agreed upon during the litigation was not enough to accomplish the required repairs. On a prorata basis each owner had to pay for the difference. This particular client was assessed about $26,000 for her share of the repairs.

In the second instance there was no indication in the disclosure statement, the purchase and sales documents or the Condo Certificate that was provided indicating there were any issues. When our client began attending the home owners association meeting she found that there was a relatively long standing concern between owners and the condo property managers about the need for major facility maintenance. The home owners dues was inadequate as far as providing enough funds for major maintenance over a long period of time. In the final analysis the property manager was not held responsible for the costs that would be incurred to perform the necessary maintenance. The home owners association are still in the process of determining how the funds, again which are to be billed on a prorata basis, will be provided. It appears that a contract will be placed based upon funds obtained after each home owner pays their share up front.

Based upon the above two incidents, in the future we will strongly recommend that any condo buyers attend a home owners association meeting, or at least obtain copies of the most recent home owers association meeting minutes before making their purchase.
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Rainmaker
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Joan Whitebook
Consumer Focused Real Estate Services
BHG The Masiello Group

In NH we get a lot of documents -- including the minutes of the last 2 years annual meetings and the last 2 years of minutes -- also we suggest the buyer call the management company and the president.  If at all possible, we suggest the buyers also contact some of the owners.  There is a lot of information that is not available in the condo docs.

March 04, 2007 03:21 PM
Ambassador
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Rich Jacobson
Your Kitsap County WA Real Estate Broker
Keller Williams West Sound Realty
Lyle, it's great seeing your blogs being posted here on ActiveRain. Looks like you're already getting some comments. Way to go!
March 04, 2007 03:27 PM
Rainer
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Lyle and Karen Hansen
Windermere Real Estate/West Sound, Inc.

Thanks for reading - and thanks for getting me started on "Rain".

 

Lyle

March 04, 2007 04:09 PM
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Rainer
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Lyle and Karen Hansen

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