By David Alan Coia
Special to The Washington Post
Sunday, October 1, 2006
New arrivals to the Washington area learn very quickly that, even with this year's slower housing market, a modest condominium unit here can cost as much as two single-family houses back home.
If you are considering a condo, your purchase deserves consideration equal to the investment you intend to make, but more than money is at stake, especially if you intend to make a condo your primary residence.
In my tenure as a board member and as president of a local condominium association (George Mason Village in Arlington), I learned many things about what prospective owners should know and ask. Some are a matter of common sense to which the "Duh!" factor applies. Others may seem more tedious but may also spare you a world of headaches later.
· Location. Starting with the basics, a top-floor end unit offers the best in comfort and return on investment. These units are sought-after because the noise generated by neighbors is minimal. There's no one above you; there's no one to one side.
The drawback, of course, is that you will be carrying furniture, appliances and groceries up flights of stars in garden-style units. High-rises will likely have elevators, which have their own constraints.
Noise aside, there are significant advantages for many people in living on the ground floor, such as ease of entering and exiting and not needing to worry about downstairs neighbors complaining about children being children.
It would also be an advantage to have a firewall between you and your neighbors. This can be an interior brick wall (at least in older units) that helps slow the spread of fire to the rest of the building, your prospective unit included.
The quality of the roof is an important consideration. When was it last serviced? If the roof has recently been replaced and is under a 10-year warranty, great. If the roof has not been replaced in the past 10 to 15 years, when is the next scheduled replacement? Most condos have a replacement schedule for roofs, painting, heating and cooling upkeep and replacement, and other capital repairs.
A condo association that does not attend to these details leaves itself vulnerable to the need for special assessments.
· Assessments and fees. Typically, the portion of the monthly condo fees remaining after expenses is placed in reserve to cover those longer-term capital expenses. It is not uncommon, however, for rising monthly expenses to erode the amount of money contributed to reserves.
Sometimes unexpected and extraordinary problems arise -- a broken gas line, for example, or sewage pipe. These require significant money beyond what has been budgeted. Such expenses are often covered by special assessments, which will be determined by the condo association board of directors. The special assessment might range from $500 to $5,000.
Ask when the last assessment was made and whether any assessments are planned. Boards often discuss them well in advance. Ask about the nature of the assessment and the amount the board has discussed. This will clue you in to any major problems with the property that may not otherwise be apparent, especially if the paint is still fresh.
Ongoing or planned assessments could amount to substantial hidden costs. You may not wish to buy where you are going to be hit for a $5,000 assessment shortly after closing.
On the plus side, special assessments usually indicate that improvements are being made on the property, which can increase the property's value.
Consider also that condo assessments are shared expenses and are often far less than what the owner of a single-family house must pay for an equivalent upgrade. Ask how the assessments are made -- in one lump sum, in installments or as an amount added for a fixed period of time to the condo fees.
And remember to compare the condo fees with those of other associations and what those fees cover.
· Maintenance issues . There's nothing quite like losing water, power, heat or air conditioning, or for that matter being snowed into the parking lot on a winter day.
Ask how the condo association handles maintenance. Having resident maintenance staff on the property increases the likelihood of quick repairs. It also ensures that maintenance workers will likely have a deeper understanding of the problems that may occur.
Other questions to ask about maintenance: Are background checks conducted on maintenance workers? Are they bonded? How long have they been employed by the condo association? What is the turnover rate among the staff?
· Social and security issues . Ask about the ratio of tenant-owners to renters. The lower the proportion of renters, the better. Resident-owners typically take better care of their property and are likely to be more actively involved in its management.
Consider not investing in condominium complexes in which rental units top 25 percent. Property management companies also become a bit anxious when the renter percentage exceeds that level.
Gang activity is often associated with rental units, but it is a problem that can just as easily result from relatives of an owner occupying a condo unit. Don't underestimate the social problems that can result from gangs. They are significant and not easily solved even through close cooperation with local police. Ask the property management company whether there is gang activity on the property.
Something most people may not think about is the number of people residing in one unit. Typically, if you are buying a condo, you are single, or perhaps a couple with a child or two. Ask about the limitations to the number of occupants per unit. Sometimes an owner will open sleeping space to individuals. It is possible, as absurd as it may seem, to have 15 to 30 adults living in one-bedroom or two-bedroom apartments.
In addition to problems that anyone can easily imagine, more people means more utility use by that unit, while the condo fees are static -- each unit is assessed at a fixed rate.
The result is that one heavily populated unit may be using four to five times the water and energy of the other units in the building. That extra utility use is subsidized by the other units, contributing to budget shortfalls that can lead to steep annual increases in fees.
What type of security does the condo association provide, if any? Are security guards on the property? If so, when and with what frequency? Are security cameras in place? Does anyone watch them? Are there alarms? Is it a gated community?
· Parking. No issue aside from safety or a large, unannounced assessment will make condo residents bristle the way parking does. In fact, parking problems can rival all other condo issues. (Poor handling of the parking policy is what prompted me to run for election to the condo board.)
Will you have an assigned space? How are extra vehicles handled? What is the policy for accommodating guests?
In reviewing the condo's parking policy, inquire about how junked and unlicensed vehicles are dealt with. Is towing strictly enforced, and who may request that a car be towed? Are there any limits to the number of vehicles that may be associated with one unit?
· Management: Find out how often the condo association board meets. Are the meetings open to all owners? Are the meetings' minutes posted and distributed to owners? Whether they are or not, ask for copies of the minutes from the last two meetings before you settle. They can provide valuable insights into problems within an association. If there are social problems, they will be discussed at the meetings. So will physical problems such as plumbing backups.
· Legal matters. Finally, condo associations or management companies usually are required at closing to provide new buyers with a copy of the association bylaws. Ask for them in advance, and read them thoroughly before you settle on the purchase of your new home.
If people must wait for you to read them, let them wait. You may find unreasonable restrictions on children, for example, or even on normal personal habits that you take for granted.
There's plenty more to consider, but asking questions before closing could go a long way to helping you decide what is right for you.
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