Condo living is a fantastic opportunity for people to live in desirable locales while enjoying amenities that an association pays for collectively. There are a few red flags when buying a condo that homebuyers need to watch for to avoid getting less than they bargained for.
Current Financial Statements Are Not Available
When an association cannot produce current financial statements, that’s a big red flag. Continually running a year behind with preparing statements may be indicative of poor financial management or administrative disarray.
A Mass Exodus Is Underway
If there is a large percentage of units for sale within a building, there is probably a good reason why. There may be an assessment on the horizon, or a project that is already in progress may be making conditions untenable.
An Association Has Levied Multiple Assessments
If a condo association imposes several assessments within a short period of time, there could be serious problems with a building, the condo board, or the management company. Find out as much as you can about assessments, and be very clear in your purchase agreement about who is responsible for outstanding dues.
When you buy a condo, you are buying more than just a unit. You are purchasing a shared interest in an association. Extensive due diligence before closing is imperative.