Ask To See These Papers Before Buying A Condo To Avoid A Potentially Large, Unexpected Expense

Posted on: 22 June 2016

When looking at condos for sale, buyers often focus on the purchase price, the condition of the condo and similar items. These are all important preliminary checks to make sure a condo meets your needs. Once you find a condo that you initially like, though, more research is needed before you purchase it. If you're considering buying a condo, make sure you ask to see these particular papers before you sign the closing documents -- or else you might be faced with a large, unexpected expense.

The Complex's Recent Financial Statements

There are two reasons to review the complex's recent financial statements. First, you'll be able to see precisely how much condominium owners are paying to the condo complex each month or year. Second, you'll also be able to see the condo complex's overall financial health. These statements will show whether the complex has enough savings to pay for a large, unexpected expense or if the complex would have to place an assessment on each condo owner to pay for a big expense.

The Board of Directors' Recent Meeting Minutes

Reading through the minutes of the board of directors might be boring, but you'll find out what the board has planned. Specifically, you'll be able to see whether there are any pending fee increases. If there are, you and other condo owners will have to pay more to the complex each month or year once those increases are approved.

The Complex's Insurance Policies

Condo complexes carry insurance policies, but not all complexes carry the same types of policies. Review your complexes policies to make sure it's insured against fire, theft and vandalism, and check to see whether it has flood insurance and windstorm insurance. If the complex doesn't have flood insurance, and the building is flooded, every condo owner might have to pitch in and pay for the necessary repairs. Similarly, if the complex doesn't have coverage against wind damage, condo owners might be assessed fees to help pay for damage caused by wind.

Tracking down and reading through all of this paperwork might take a little while. Taking the time to go over each of these documents, including all the fine print, is the only way to really assess a condo complex's financial position, planned assessments and insurance coverage. These are all things you'll want to know about before you buy a condo and might be asked to help pay for the complex's expenses.

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