By Richard D. Vetstein, ESQ
Buying a Massachusetts condominium unit is VERY
different from buying a single family home. A lot of buyers don't
appreciate the difference, unfortunately, until they have lived in the
condominium for a short time. From crazy condo trustees (remember the Del Boca Vista episode from Seinfeld?), pet rules and controversies, to leaky roofs - due diligence is critical before you buy a Massachusetts condominium.
From a legal perspective, a condominium is a special type of real
estate ownership. When you purchase a condominium unit, you get complete
legal title to the unit itself and an "undivided" interest in the
common areas of the condominium project which is really everything other
than the units. Common areas typically include the land underlying the
project, the exterior walls, roof, elevator, building entrances and
exits, lobby, interior stairways, swimming pools, recreational
facilities and halls.
Each individual unit owner is responsible for everything within the
walls of their unit, while the condominium association and its board of
trustees are responsible for all the common areas and facilities. This
is a critical part of a condominium. You are buying into the entire
project as much as you are the unit, and your decision will impact
your daily living and your ability to re-sell.
The management and maintenance of the condominium common areas are funded by the collection of monthly condo fees.
The condo fees are used to pay for things like master insurance,
property management, landscaping, water/sewer, snow plowing, pool
cleaning, roof repairs, etc. Well run condominiums will also allocate a
percentage of condo fees to a capital reserve fund to pay for expensive one-time capital repairs, usually leaky roofs, old boilers and big ticket items of that nature.
To borrow from a famous phrase, not all condominiums are created
equally. Some condominiums are very well run; some are quite poorly run
and underfunded. Buyers interested in purchasing a condominium unit
must do their homework: not only about the condition of the individual
unit they are interested in purchasing, but on the financial health
and governance of the condominium as a whole.
Condominium finances also have a significant impact on whether your
unit will qualify for certain loan programs. Please read my post, 10 Questions To Ask Before Buying A Massachusetts Condominium for more info on that topic.
Condominium associations are usually run by a board of trustees
ranging from 2 to 5 persons. Unfortunately it's difficult to ascertain
whether these individuals are sane and competent. What you can do as a
buyer is request the last 3 years of condominium minutes to see what's been going on with the condo. You should also request the budget for the last 3 years and have the trustees fill out a condominium questionnaire
with detailed questions about the financial management. If no minutes
are available, that's a red flag of poor management. Watch out for
larger condominiums that are self-managed, that is, not run by a
professional management company. Managing a larger condominium is
challenging work and a full time job.
Another critical part of a buyer's due diligence is to review the
condominium documents, the by-laws, rules and regulations. Here is an
example of condo rules I found online from the Liberty Estates Condo in Uxbridge.
One of the most contentious rules in condominium governance is pets.
Condominiums can legally regulate pets. They can prohibit them entirely,
allow them, or adopt reasonable regulations to control them. Take the
Liberty Estates pet rules:
If your dog has been known to get into trouble, this rule may pose a problem. Better to know ahead of time is my point.
Other important rules cover whether you can smoke, rent out the unit, decorations, paint colors, quiet hours, storage, parking, grills, decks, and signs.
View more from The Massachusetts Real Estate Law Blog
Mr. Vetstein has represented clients in hundreds of lawsuits and disputes involving business, real estate, construction, condominium, zoning, environmental, banking and financial services, employment, and personal injury law.
In real estate matters, Mr. Vetstein handles residential and commercial transactions and closings. In land use, zoning, and licensing matters, Mr. Vetstein offers his clients an inside perspective as a former board member of the Sudbury Zoning Board of Appeals. Mr. Vetstein has an active real estate litigation practice, and was a former outside claims counsel for a national title company.
Drawing on his own business degree and experience, Mr. Vetstein assists his business clients with new business start ups, acquisitions, sales, contract, employment issues, trademarks, and succession planning. Mr. Vetstein also litigates, arbitrates and mediates a wide variety of commercial disputes.
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