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| REMEMBER, YOU SHOULD ALWAYS CONSULT AN ATTORNEY BEFORE SIGNING A P&S! |
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Houses
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If you own a house, you own the building itself as well as the land it sits on. As owner, you are responsible for the upkeep of both.
You have the right to sell a house when you choose, to any buyer willing to pay the price you're asking. If you have a mortgage on the property, some of the sale price goes directly to the lender to pay off the loan.
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Condominiums
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If you own a condominium, you own the living space within your unit. The building complex, including the outside walls of your unit, the land, and the facilities, such as a pool, are owned by the condo association. You'll owe property tax on your unit, and sometimes on a percentage of the shared facilities.
You'll owe a monthly maintenance fee to the condo association, which is responsible for upkeep of the complex. You are also subject to the community guideines, which may restrict the changes you can make to your unit.
You can sell your unit to any buyer you choose. If you have a mortgage, part of the sale price goes directly to the lender to repay your loan.
TIPS FOR PURCHASING A CONDO:
* Location is a key factor
* Your condo should have at least one unique quality that will pique interest (for example, a private outdoor space, a view, a garden)
* Buy in a building with a good condo association. It's wise to make your purchase contingent on approval of the financial condition of the condo homeowner's assocation. Check the replacement reserves carefully. If the budget doesn't have a reserve fund for major expenditures, condo owners may be hit with special assessments for major repairs. You could ask if there are any pending litigations filed against the condo association or or any pending major projects yet to be completed that will require a future special assessment.
* Ask if there are any unusual bylaws, rules and CC&Rs (conditions, covenants and restrictions). There may be limitations, such as prohibitions of pets and rentals.
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Cooperatives
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If you buy a cooperative apartment, or co-op, you don't actually own the unit you live in. Instead you own a share in the cooperative corporation, which grants you the exclusive right to live in your unit indefinitely, provided you abide by the rules of the cooperative.
Your share of the property tax and your montly maintenance fee are based on your precentage of the building's square footage. The co-op corporation is responsible for maintaining the building and grounds and enforcing community regulations.
3 QUESTIONS TO ASK THE OWNER, MANAGER, OR BOARD OF DIRECTORS BEFORE BUYING A CO-OP
1. Is there any pending litigation filed against the co-op corporation?
This is very important because once you are the owner, the outcome of a law suit could be passed along to you, the individual owner, in the form of a "special assessment" that there is no way around paying.
2. Are there any pending major engineering projects yet to be completed that will require a future special assessment?
Problems that will have to be dealt with such as eroded concrete balconies, road repaving and sewer or electrical reworking could result in an unexpected big bill for you after moving in.
3. Does the co-op have adequate reserves for repair or replacement costs of a major project?
Be very wary of buying into a no-reserve development.
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