By Kevin Ronan
As inventory for residential properties in Cumberland and York Counties continues to be low, a condominium or townhouse may be a good alternative to a single-family home. Local purchase prices for a condominium may be lower than a single-family home and as an owner you enjoy the added benefit of having external repairs and maintenance taken care of by the homeowners association (HOA).
If you are exploring a condominium, it is important to be familiar with some relevant terms and language. Please be aware that the rules and regulations may be different in different states. With the help of a local Realtor® you can access the information you need to make an informed decision. Let's start with some of the following basics.
The Homeowners Association (HOA) refers to a group of owners. If you purchase a property in the condominium complex, you automatically become a member of the HOA with voting rights on all HOA topics.
A Board of Directors composed of condominium homeowners are elected to represent the members of the association. The Board is there to enforce rules, access financing, change bylaws, establish capital reserves and work with the property management company.
The association is required to generate meeting minutes which highlight all board and association discussions. As a potential buyer, you may request meeting minutes. Common topics include elections, length of service and member voting guidelines. You may hear the term proxy which simply refers to a document that allows members of the homeowners association to vote in the event that they cannot attend any scheduled homeowners meeting. The bylaws will define the rules which governs the operations of the Board of Directors.
Most HOAs have a budget outlining routine expense line items such as landscaping and plowing. The budget also should include any out of the ordinary project expenses planned in the near future.
Look out for any planned special assessments that require owners to pay in addition to normal monthly fees. Special assessments can be for anything including roof replacement, chimney repairs, exterior painting or replacing exterior siding. These special assessments can be quite significant and needs to be factored into your purchase decision.
Common areas are shared areas available to owners and their guests. Shared areas are paid for by the HOA as part of the monthly charges. Examples of this may be a community pool, parking lots, tennis courts and the property grounds.
In the State of Maine, a buyer can expect the present condominium owner to provide to you, the buyer, a resale certificate. The resale certificate will include any restrictions on conveyance or sale of the unit, monthly expenses, anticipated capital expenditure, a recent balance sheet and expense statement, association bylaws and rules and regulations.
You may hear the term proxy which simply refers to a document that allows members of the homeowners association to vote in the event that they cannot attend any scheduled homeowners meeting.
I hope this information assists you in your residential property search. At the time of this article there were 120 condominium or townhouses for sale or sale pending in Cumberland County alone, at some price points greatly increasing the inventory available. You can anticipate list prices ranging from $140k- 1.5 million, with condominiums offering many of the same features of single-family houses. Buyers, enjoy your search!
This article was brought to you by Kevin Ronan, Associate Broker affiliated with Alliance Realty, 290 Bridgton Road, Westbrook brought this article to you. Kronan388@gmail.com, 207-838-4855.