Read Them, Or Weep

Condo Association Documents Give Buyers a Glimpse of the Future

Perhaps someone should have highlighted the word "estimate" for Dave Rivera as he reviewed the budget for a new 30-unit condominium in the District's Chinatown.

After spending less than an hour to go over hundreds of pages covering the condo association's rules and finances, he completed his purchase of a two-bedroom, $400,000 condo.

Six months later, the association needed cash and levied a $15,000 special assessment on its owners, amounting to about $500 each. Within a year, Rivera's monthly maintenance fee rose from $158.79 to $290.

The estimated budget provided by the developer wasn't realistic, said Rivera, a lawyer. "One day, the money ran out."

About half of the unit owners had predicted that the initial maintenance fees would not be enough, while others, including Rivera, were shocked. But Rivera, who said the fees are still relatively low, said he knows what the developer would say: Did you read the documents?

Before buying a condominium, buyers are given a few days -- how long varies by jurisdiction -- to study what can be hundreds of pages of documents spelling out the community's rules and financial health. In those documents are nuggets of information as minuscule as the operating hours of the laundry room and as significant as plans for major construction, or pending lawsuits. It is during that period, before closing on a deal, that home buyers can walk away without risking the loss of their deposit.

"These statutes are built to give purchasers the information they need to make an educated decision," said Pia Trigiani, a lawyer at Mercer Trigiani, a firm that specializes in real estate transactions.

Yet, every winter, Lisa Franklin faces a predictable deluge of calls from newcomers at the Fireside Condominium in Gaithersburg. They want to know when their parking spaces will be cleared of snow. The association clears the sidewalks and drive lanes but not individual parking spaces, said Franklin, the community manager.

"I am sorry, but I tell them that they might need to borrow a shovel from a neighbor," she said.

New owners often have not read the community's rules and bylaws carefully, leaving them confused about what services the association provides and what is considered the owner's responsibility.

"Those are huge misunderstandings. These are not apartments. They are single-family homes stacked on top of each other," said Franklin, executive vice president of ProCAM, a Silver Spring management firm. "Of course, all of that information is disclosed, but people don't read their resale packages. They should, but they don't."

The level of service provided by an association varies, but new owners sometimes move in with unrealistic expectations. "Part of homeownership is taking responsibility for those things, especially in a condominium," said Peggy Ferris, an agent with Weichert Realtors in the District. "Part of it is being proactive about checking those documents. It is your right and duty to pay attention to that as part of being a home buyer."