1618-4 Condo questions •
Printing . . .
Press [RETURN] to continue or type q to return to Menu:
mhcur CONDO QUESTIONS 10/12/2003
THE MIAMI HERALD
Copyright (c) 2003, The Miami Herald
DATE: Sunday, October 12, 2003 EDITION: Final
SECTION: New Homes PAGE: 1H LENGTH: 102 lines
SOURCE/CREDIT LINE: BY MIKE SEEMUTH, humidity@aol.com
CONDO QUESTIONS
For first-time buyers, condominiums have advantages over single-family
homes, starting with low maintenance for people who don't want to mow a lawn
or clean a pool. They provide the same mortgage-interest tax deductions as
single-family home ownership, they may score higher on security, and many
condominiums have compact prices that first-time buyers can afford.
"Fifty-one percent of all home sales in Miami-Dade County are now new or
pre-owned condos, " said Ron Shuffield, president of Coral Gables-based
Esslinger-Wooten-Maxwell Realtors. —We are rapidly becoming a condo
community. ' '
But people preparing to purchase their first condo should be aware that
when they move in they enter the legal realm of a mini-government with real
power.
One advantage of owning and occupying a house is independent decision
making vs. the rule-by-committee reality that comes with condo community
living. Each unit owner is expected to live by the rules of an association of
unit owners, regarding everything from pets to sublets.
So before buying a condo, it pays to review the rules and regulations, or
bylaws, of the condominium association. Many communities have regulations
governing the size and type of permitted pets, the kinds of holiday
decorations that can be displayed, or the activities permitted in common
areas.
Look around before buying into a 'particular condominium. If the pool and
other common areas are clean, the garbage facilities are orderly, there is
adequate parking and the buildings appear in good repair, those are signs of a
coimuunity that is well managed.
If possible, ask some of the residents what they think of the day-to-day
management of the community. The operations and finances of a condominium
community usually are managed by a professional management company hired by
the owners' association.
Ask if there have been any recent special assessments for repairs or
improvements. Special assessments often are approved by condominium
associations in four- and five-figure amounts. Some owners have to borrow the
money to pay them.
Sometimes a special assessment for a common cost, like major roof repair,
is unavoidable. But a condo association that routinely approves special
assessments for major repairs may not be planning its finances properly, which
can cause cash flow problems for owners on a tight budget.
Condo associations have no legal obligation to disclose their past special
assessments, or anything else, to people interested in buying units from
individual owners. But all owners have access to association records. And
while they are under no legal obligation to share such records with potential
buyers, they often do so to facilitate a sale.
Most mortgage lenders, before agreeing to provide a loan,, require the condo
association or property manager to fill out a detailed questionnaire that
includes such items as the percentage of units rented, the amount of reserve
funds, whether there is any litigation pending and the number of owners late
in paying their assessments. If those items aren't satisfactory, lenders may
refuse to provide mortgages for a particular condo. The buyer usually has to
pay $75 to $100 to the association or management company to get the
questionnaire completed.
If the portion of investor-owned units approaches one-third of the total,
the terms of a mortgage loan to buy a unit in that condominium may get more
onerous, said Shuffield of Esslinger Wooten Maxwell. Some lenders won't give
mortgages at all in buildings with more than 30 percent rental units.
Condominium associations provide services such as garbage collection,
landscaping and routine maintenance, and approve the monthly maintenance fee
charged to each unit owner. Some older condominiums with minimal amenities
have monthly maintenance fees below $300 - hundreds less than owners pay at
many of the new high-rise condominiums in South Florida.
But beware of maintenance fees that seem too good to be true.
Monthly maintenance fees should cover not only routine expenses but should
provide for a reserve fund for emergencies and major repairs. There should be
an available schedule of anticipated repairs - and reserve funds to cover them
- that does not put an additional burden on the homeowners.
For first-time buyers who intend to rent their units, the condominium
association's sublet policy will spell out their options. In buildings
marketed as "condo hotels, " shorter rental periods, such as 30 days, are
allowed. But keep in mind that sublet policies, like other policies set by the
condominium association, are subject to revision.
Buying a condo before it is built poses different issues. First-time buyers
of condos in the preconstruction phase should check out the track record of
the developer. One way to do that is to ask unaffiliated real estate sales
agents about the developer's achievements and reputation.
Even a reputable developer is vulnerable to falling behind schedule,
though. David C. Brown is planning to buy his first condo, a 26th-floor
apartment in a two-tower development called One Miami on a picturesque
waterfront site bordered by Biscayne Bay and the Miami River.
For him, the investment is all about location, location, location. "The
mouth of the river is where Miami was born, " said Brown, 45, a historical
tour operator who moved to South Florida in 10b6 from his native Connecticut.
How soon it will become the birthplace of One Miami remains to be seen,
however. In January, Brown signed a preconstruction purchase contract for a
one-bedroom unit.
But he still isn't sure how soon he'll be able to occupy the unit because
construction still hadn't started as of mid-September: ' 'A.11 they've said is,
two years after the groundbreaking. "
FOR MORE INFORMATION
Florida condo law is administered by the Department of Business and
Professional Regulation, Division of Florida Land Sales, Condominiums and
Mobile Homes. Consumer information is at
www.state.fl.us/dbpr/lsc/condominiums/information/faq.shtml
KEYWORDS:
TAG: 0310170396