As the prices of houses have risen, increasing numbers of purchasers have turned to condominium ownerhip - particularly first-time buyers and retirees.
A condominium owner has title to a specific unit within a building or development. That unit is treated in much the same manner as a private home for financing and tax purposes. The condominium owner is also part of an association that sets the general rules for the project and owns the common elements.
If you are thinking about buying a condo, examine the history of the building's operation. Check the condo budget and see how realistic monthly assessments have been. Get a letter from the condo association showing the current budget. Ask if major repairs are anticipated during the next three years. If so, will association reserve funds cover such costs or will special assessments be required?
With new condos, buyers should be leary of "low-balling," the practice of citing a low monthly fee that rises as the project is sold out. If your project is now being constructed will the amenities, such as a pool, be completed in a timely fashion?
Also, in many cases the developer retains control over the condominium association until a certain portion of the units are sold. With a large project, it may take years before the unit owners control the association. Will the developer pay assessment fees for units that are unsold?
What specifically is owned by the condominium association? In some cases developers have retained parking areas and recreational facilities for themselves. There are condominiums built on land that is leased for 99 years. After then, the property reverts to the original owners. Always ask exactly what is owned by the association and check the condominium declaration and by-laws to assure that the information you can receive is correct. It may be worthwhile to have an attorney review these documents for you.