If you’re buying a condo, one crucial step during the attorney review period is reviewing and approving (or disapproving) the condominium documents. This step is specific to condos and does not apply to single-family homes or multi-unit buildings.
Key Documents to Review:
- Declarations and Bylaws
- Rules and Regulations
- Current Year Budget
- Meeting Minutes
- 22.1 Disclosure (or equivalent document summarizing the building’s financials and key details).
Why Reviewing These Documents Is Important
When purchasing a condo, you’re not just buying a unit; you’re investing in the entire building. These documents provide insight into the financial and operational health of the property, as well as any potential concerns.
Here are some key considerations:
- Financial Health:
- Does the building have sufficient reserves to cover major repairs?
- Are there delinquent owners failing to pay HOA fees?
- Are there plans for large special assessments that could increase your monthly costs?
- Upcoming Maintenance Issues:
- Review meeting minutes for any mention of significant repairs or upgrades (e.g., roof replacement, façade work, or HVAC system overhauls).
- Building Rules:
- Pet Restrictions: Are there limits on the number, size, or breed of pets?
- Move-In Procedures: Are there specific move-in days or times? Are elevator reservations or fees required?
- Rental Policies: Can you lease your unit? If so, are there restrictions on lease terms?
- Occupancy Levels: If over 50% of the building is rented, some mortgage lenders may decline your loan due to the increased risk.
Steps for Reviewing Condo Documents
- Read Each Document Thoroughly:
- Pay special attention to the meeting minutes for candid insights into the building’s operations and potential challenges.
- Note Key Questions or Concerns:
- Write down any unclear points or items that need further clarification.
- Use the Mortgage Officer’s Checklist:
- If applicable, refer to your lender’s list of critical questions about the condo to ensure nothing is overlooked.
- Decide How to Proceed:
After reviewing the documents, determine whether:- You feel comfortable proceeding with the purchase.
- You need more information or clarification before making a decision.
- You’d prefer to cancel the contract based on your findings.
Next Steps
Once you’ve completed your review, email us:
- Any questions or concerns you have.
- Whether you’re ready to move forward, require additional documentation, or wish to cancel the contract.
Reviewing condo documents thoroughly is essential to ensure your investment is sound and aligns with your lifestyle and financial goals. Let us know if you have questions or need assistance interpreting the information!