Purchase or Sale of a Condo
A Condominium is of course different from a single family home. When you purchase a Condominium, you only own the inside of the unit itself. The land below the property, the air space above the property, the front, the side, the backyard, the exterior of the unit, the stairs outside of the unit (if any), are all owned by all the unit owners within the development collectively, much as a Cooperative.
A Condominium Deed is recorded like a House Deed, when you purchase a Cooperative there is no Deed. You merely get a stock certificate indicating how many shares of stock you own. Likewise the mortgage is recorded as a Deed to a house will be recorded.
Owners become members of the homeowners’ association. The association is responsible for maintaining the grounds, structures, and systems in the complex and will charge a fee which you must pay.
Before Entering into Contract it is Important to Review the Condominium Documents.
These include the Declaration, the Bylaws, the Plats and Plans, and the Rules and Regulations. We often call these the CC&Rs (covenants, conditions and restrictions here in NY).
If your Condominium Association is incorporated, you should also obtain and review the Articles of Incorporation. These documents will spell out the operating procedures under which the Condominium functions.
Condominium Associations may impose use restrictions on your use of the property. These could include your right to sublet the unit which is important if you are for instance forced to relocate for work and do not wish to sell the unit. The rights to use any amenities of the Association could also be spelled out for instance will you have to pay extra to use a pool or gym on the property?
Even your right to have a garden can be subject to the rules.
The Condominium Bylaws will also let you know if you have any restrictions on changes you may wish to make to the unit such as architectural guidelines.
The Deed of the present owner will show the share of your unit with reference to the total number of shares. For instance in a place like Parkchester, you will have a relatively small share interest because of the great number of units. In a small condo that will be a higher share percentage.
This is important to be able to figure out what your share of the common bills will be and of course the current budget must be provided so we can see if the association is operating in the red or if it is properly funded and if the association has adequate financial reserves.
Are there any assessments either in effect or planned.
No one can guarantee that the condominium fees will stay the same. If you were to buy a single family house, your real estate taxes, utility bills, or other maintenance costs may fluctuate on a year to year basis. The same is true in a community association. You may want to talk to the seller and try to convince him or her to guarantee the level of condominium fees for a period of years, but obviously all of this requires negotiation between buyer and seller. If the seller agrees, it must be made part of your purchase contract.
Finally is there a Management Company? In a business with a budget of several million dollars a full time management company, with insurance and experience is a definite plus.
Ask other owners what they think of the Association and the problems if any they are experiencing. Are there noise complaints or owners who owe money to the Association?
How are the grounds kept? Is there adequate parking and what is the condition of the units that you can see from walking around the complex?
For more information regarding the specifics of New York City Condo’s, please call Evan D. Rogers Esq at 718.994.1640 or email him at Evan@rogersandrogersesq.com