Complexities of condo buying: know your rights
When you buy into a condominium, you have rights as an owner and you should learn what your rights are even before making a purchase of a unit. It is important to understand what you should be able to do and whether the building management and board will give you your rights without a lot of prodding.
As an example, a condo owner complained in a newspaper column that he was charged a $60 per hour fee for locating the records of his condo building even though the records were stored on site. In the jurisdiction in question, condominium legislation provided that the condo corporation must find and produce records for examination and can charge fees only for copying of the records. The condo board can’t pass a rule slapping a fee on locating records needed by unit owners.
A responsible condo board will make sure the condo’s insurance covers damage such as that caused by flooding; however, this condo policy probably won’t cover damage to unit improvements (made by the unit owner after move-in) and some components such as flooring may be excluded. It is vital to know what the building and the owner’s insurance obligations are in the condo building being considered. It is also vital to get insurance for the things not covered by the condo building and to add the cost of this insurance to operation costs. Check also to determine the deductibles on insurance taken out by the building and the unit owner.
The unit owner has the right to know what the reserve fund of the building is and what it might be used for in the near future. In some cases, condo boards may try to slap a special assessment on unit owners even though there is enough money in the fund to pay for needed repairs. These boards argue that the fund will be needed for other things in the future. This may be a fallacious argument since the fund is supposed to be used for needed repairs and to avoid the need for a special assessment.
If this happens to you, demand that the board specify other repairs that will be needed in the foreseeable future; if there are none, the reserve fund should cover all current repairs without special assessments until the fund is totally depleted. That’s what the fund is for.
Don’t get frustrated and angry. Know your rights and the building’s history of upholding the rights of unit owners before buying into the project.