Buying a condo is much like buying a house - a complex process.
Knowing the terms is a good start toward making an informed purchase.

What is a condo?

The literal meaning of the word condominium is “ownership with others.” A condo can be Garden Style – a one story apartment; a Townhouse – Two or more stories of a building; or a Detached - a separate building that looks like a single family home. In each case, you would be buying the actual space within the living unit as well as sharing ownership in the common areas. Common areas generally include parking areas, playgrounds, club house, open land, etc.

What do condo fees cover?

This can vary greatly from one condominium association to another. Most condo fees include coverage by a master insurance policy for the buildings and liability. You would still need to obtain a policy for your personal belongings. Some items that may (or may not) be covered by the fee are: heat, hot water, cooking gas, water, sewer, trash removal, exterior maintenance, pool, clubhouse, tennis courts, etc. Condo fees and what they cover vary greatly, an important consideration in deciding which condo to buy.

What are “Condominium Documents?”

The State of NH requires all condominiums to have certain documents on file when a condo development is established. First, the Declaration is the document that establishes the condominium complex as a legal entity. It calls for the establishment of a condominium association made up of all the owners of the condominiums in that complex.
Second, there are by-laws, rules for the administration of the condominium property. It is important to understand the by-laws of the development in which you will be purchasing a unit. Some by-laws prohibit pets while others have restrictions on noise, visitor parking, and so forth. The original by-laws can be amended by a vote of the condominium association members. Some of these documents can be quite lengthy and hard to read. However, a realtor who is a condo specialist is familiar with these documents and can explain them to you. Ask your real estate agent to obtain the latest information on recent budgets and changes to the by-laws so that you can choose the best complex for you.

What is a ‘Special Assessment?’

When the condo fees and the reserve account will not cover the cost of a major repair (e.g. new roofs, re-paving parking lot) the condo association will ‘assess’ each member a proportionate part of the cost of such repairs. Payment usually is spread out over several months or a year. Ask for a history of special assessments which will provide valuable information as to how well the complex is managed.

Why do I need to see the condo association budget and the meeting minutes?

The budget will indicate how much is being spent on each item covered by the condo fee. The size of the reserves gives you insight regarding how secure the association is. Reading the minutes of the most recent meeting will tell you if there are any special assessments, condo fee increases or major changes being considered by the board.

Is financing different for a condo?

Obtaining a mortgage to buy a condo should not be much different from the process for buying a single family home. The one difference is that a condo questionnaire is required. The lender will want to be sure that the complex is one they consider a good investment. They need to know such things as how many units are owner-occupied, how many owners have not fully paid their condo fees, does one investor own more than 10% of the units, etc. Your real estate agent will assist your lender in getting the questionnaire completed.

Are condos a good investment?

The value of condominiums tends to increase (or decrease) in much the same way that single family homes do. Ask a condo specialist for information on the numerous condo complexes and on recent sales to determine which might be the best investment for you.

What is the difference between a condo and a condex?

A condex is a two family building owned by two individuals who are the sole members of their condominium association. Usually there is no condo fee, although the two members may agree to pay a monthly fee to a joint bank account which requires both signatures for withdrawals. When a new roof, etc is needed the funds are used for that purpose.

What is a land lease?

This is a seldom-used form of ownership for condo’s or single family homes. A developer may choose not to sell the land on which a home or condo complex is located, but may opt to lease the land either to the condo association or to each individual. If leased to the association the lease fee will be incorporated into the condo fee; if leased individually the unit owner pays a monthly fee to the developer which is totally unrelated to the condo association fee the unit owner also pays.

For answers to any further questions please contact:

Julie Warhola, Broker Associate Condominium Specialist RE/MAX Properties, Team DeSantis Cell: 603-321-5540

	Team DeSantis | RE/MAX Properties
	169 Daniel Webster Highway
	Nashua, New Hampshire 03060
	Phone :: 603.589.8800
	Email :: Info@TeamDeSantis.com