5 Questions to Ask Before Buying into the Condo Market

Condos are recommended for people looking to try out the world of home buying, as well as aging adults looking to downsize. Before you jump into the condo market, do your homework and ask these questions before buying a condo. If you still have other questions that need to be answered, talk to the H&K Insurance Agency’s condo specialists today.

What Are the Monthly Condo Fees?

Condo association fees are calculated based on how many units there are, what it costs to maintain the property, whether the community is professionally or self-managed, and funds set aside for litigation and major repairs.

For major repairs, the condo association should be tucking away a portion of these fees into a reserve each month. If a huge repair occurs and the association doesn’t have enough money in its reserves, you may be charged a special assessment to cover the costs. A condo’s financials should be an open book, so you are able to determine if a condo’s income and expenses match up—avoiding any red flags like frequent special assessments.

How Comprehensive are the Amenities and Rules?

Each association has its own unique bylaws and regulations which buyers should review before their purchase. These are spelled out in the complex’s covenants, conditions, and restrictions (CC&R). Some communities allow pets, performing renovations, and owning a garden. However, there are many complexes that forbid that. You’re agreeing to these rules when you buy into the condo market, regardless of your lifestyle.

As for extras, many condo complexes have amenities like pools, fitness centers, tennis courts, and storage spaces that are open to anyone living in the community.

Are There Any Pending Lawsuits?

Lawsuits can be a huge financial drain on any condo board if they happen to lose in court. It can also signal a poorly run organization. If there are no pending lawsuits, take a quick look at a condo’s liability insurance to make sure it’s up to standards.

Is the Condo Association Self-Managed or Professionally Run?

A professional management company can add great value to a large and small condominium community with the well-run governance of the common areas. For smaller condominium communities, a self-managed association works just as well.

What Does the Master Insurance Policy Cover?

The condo association should have up to $1 million or even more in coverage under the master policy. Before buying into the condo market, you should always buy an individual HO-6 policy that would cover the interior of the unit, including the contents. The master policy and condo by-laws may not cover all personal possessions and interior damages from roof leaks or pipe bursts. Be sure to review a copy of the master insurance policy. If you’re still unsure about what is covered under a condo master policy, refer to our blog, What Does My Condo Master Policy Cover?

Buying a condo can eliminate a slew of the stresses that come with home ownership. Units usually cost less than traditional homes, and most of the maintenance is taken care of—leaving time for you to sit back and relax. Review the insurance policies that the condo association provides. If there is something important that is not covered, it may be time to purchase your own individual condo policy through H&K Insurance. Contact our specialists to help you understand new or existing policies.