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A Guide to Condominiums
A condominium is a unique style of home, a unit in a multi-owner property governed by a condominium association. It can be a great purchase. The New York condominium market has been rising steadily for the past few years. While this trend may not continue for long, the New York condominium market has regained the momentum and importance it had in the initial condominium boom of the 1980s.
Condo buyers fall into three main groups; first-time buyers making the jump from renting, people looking to buy a second home that they will use part-time, and retirees who are trading in high-end homes for the low-maintenance lifestyle a condo provides. A condominium can be a great purchase under the right set of circumstances, but some people still dismiss them as glorified apartments.
If you are not comfortable living within condominium rules and restrictions, and in close proximity to others, then a condominium is probably not the place for you. Before you buy a New York condominium, make sure you understand exactly what is involved in condominium living.
When purchasing a condominium, the owner buys the title to his or her individual unit, up to the walls, but not including them. A common description of a condominium is a “box in the air.” Common areas of the development, such as stairwells, dividing and outer walls, fitness centers and rooftop gardens, are under shared ownership. Each unit owner holds an interest in these spaces.
In order to manage the maintenance and repair of the shared common areas, every New York condominium development has a condominium association, also known as a unit-owners’ association. The association is elected by New York condominium owners and makes decisions in the interest of the community.
The condo costs include down payment, mortgage and property tax. Condominium fees, otherwise known as maintenance fees, are paid by every resident to help with the maintenance of the building, pay the salaries of groundskeepers, concierges or repair people, and provide luxury facilities such as a pool, gym or rooftop garden. This fee is subject to change. When an unexpected repair or planned modification exceeds the cost of the condominium fees collected, the special assessment fees are collected.
Condominiums have a set of rules called Covenants, Conditions and Restrictions. The rules vary from one condominium development to another. They may impose restrictions on pet ownership, noise levels, remodeling projects, and renting. The condominium association enforces these rules. It is a good idea to read the rules to make sure that you are comfortable with them before you purchase a condominium. The condominium association budgets and determines the condominium fees for all units. Condominium fees are by the size of your unit, and the projected expenses for building maintenance and repair.
Condominium associations vary in their organization and expertise. Some questions you may want to look into are; does the association maintain a reserve of funds to pay for unexpected and potentially expensive repairs? Has the association maintained the building in good repair? Do they handle repairs and maintenance before they become big problems? Before buying it is a good idea to get an inspection done on the unit you are interested in, as well as the entire structure, to identify any potential problems. Does the association have plans to add any facilities, such as a swimming pool or gym, in the near future? This could cause a sudden increase in your fees.
Ask to see the minutes of the last few condominium association meetings, which should reveal any such plans. Does the development have any pending legal actions? Are there any disputes between owners, with developers, or with the association that you should know about? What is the association’s reputation in the building? Talk to other owners for comments or complaints about the association’s activities.
Developers do not generally retain a long-term interest in a building, but the work that they put into it is important. A home inspection can turn up major structural flaws in the building, but do not rely on this alone. You should research the developer’s record of accomplishment and find out if there have been any problems with its previous developments. Also, find out about the financial stability of the developer. If the developer is no longer in business, your condominium association may have little or no legal recourse in case of major flaws in the property. Therefore, before buying a condominium and investing in real estate it is advisable to do a through survey of the project.
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