Condo Selling 101

For Buyers

If you are looking to buy a condo, you should know there are some differences in owning a condo from owning a single-family house. This basic guide answers some common questions about condo ownership and gives you an idea of what to expect from condo life.

Are there additional dues associated with owning a condo?
Yes, you are required to pay a monthly assessment fee. Assessments (also called association fees) vary from one condo building to the next. The funds go toward common expenses, such as building maintenance, grounds-keeping, snow removal, garbage pick up, etc. The fees are shared by all condo owners in the building or complex and may increase year after year.

How much are monthly assessments?
Your monthly assessment amount depends on several factors. The extent of building amenities can greatly impact this number because the fees must cover upkeep for all common areas. A condominium with pool, fitness center and gardens has more expenses than a condo with just units and no extra amenities. Some assessments include utilities like water and heat - this usually occurs in larger condo buildings.

Who supervises the collection of assessments and payouts?
Assessments are collected by the condo association, which is made up of a board of unit owners. Organization of the condo association can be different from one condominium to another. Some condos only have a few units, in which case all residents are usually included in the board. The board is in charge of funds and payments.

What are special assessments?
When an unexpected repair needs to be made to the building that cannot be covered by the "reserves," a special assessment is charged. Reserves are savings built up from leftover cash after the regular monthly expenses have been paid. Some condo associations have solid reserves to pay for unforeseen incidents, while others have little or no money stashed away. The special assessment amount is dependent on how much is needed to pay for the job. Say the roof needs replacement ... the cost is divided by the number of units and each condo owner is required to cough up the dough. It's a good idea to inquire about a condo's reserves when looking at places. The risk of a hefty special assessment is something you'd want to know about before making any decisions to buy.

Do condo owners have to pay property taxes?
Yes, it is just like owning a single-family home in that you pay city property taxes. The good news is the amount is likely to be less than if you owned a house in the same location because the land holds multiple residences and taxes are divided among them. Keep in mind property taxes often go up over time, but this usually coincides with the value of your home increasing.

Do condo associations have rules and regulations unit owners must abide by?
Yes, usually the condo association has policies and restrictions in writing, often in the form of an official code book or contract. All rules, limitations and guidelines for condo owners are listed and explained. Common inclusions are pet policies, monthly assessment amount, items covered by the assessment, terms of use for common areas, occupancy restrictions, smoking boundaries, etc. Some condo associations are very specific in their set of rules (e.g. no skateboarding in the complex, no dogs above the fourth floor, no blasting the stereo). Again, be sure to review the condo rules before you commit to purchasing the place.

What is the difference between a condo and a townhouse?
A townhouse or townhome is an attached single-family residence, which means there are shared walls with other units in the complex. However, a townhome does not have other units above or below it. Like in a condo, townhouse owners are required to pay monthly assessments that go toward general maintenance of the building. In contrast to condos, townhouse owners are normally responsible for the upkeep of their full lot (could be a small private yard or patio space). Grounds surrounding a condominium are considered common area and are taken care of with communal funds.

How is a loft different from a condo?
This mainly refers to the style of architecture and layout of the unit. A "hard loft" has an open floor plan (possibly with partial walls to indicate separate rooms), exposed ducts and infrastructural elements, and higher ceilings than the standard 8' height. Customarily, hard lofts are extremely rough spaces with no designation of rooms except for the bathroom. The kitchen appliances are the only defining component of the unit. A "soft loft" has the look and feel of a hard loft (exposed brick walls, rough finishes, conjoined living space), but its interior construction is closer to that of a condo. There are identifiable rooms and more delineation of the unit itself. Oftentimes, lofts are fashioned out of old industrial buildings or warehouses - part of the reason they are characterized by tall ceilings and stark interior design.