Boston downtown Condominium ownership is a very special kind of home ownership. There are a myriad of issues affecting how much you’ll enjoy living in the unit and what you can sell it for when you are ready. Recognizing the early warning signs of trouble and researching the potential risks is an important first step in the purchase process. The following list of “red flags” should prompt you to do more research into the cause and potential consequence of the matter in question. Here are 12 warning signs you’re buying the wrong Boston condo for sale.
#1: Unusually Low Condo Fees
Unusually low condo fees may indicate the condo association is not collecting a sufficient amount to meet expenses and maintain an adequate capital reserve fund. Under funded condo fees will at some point be forced to impose a “special assessment” to cover the shortfall. Special assessments can be upwards of several thousand dollars and can be due in as little as a few weeks. One example would be Boston condos for sale at Charles River Park.
#2: Abnormally High Condo Fees
Abnormally high condo fees may be indicative that the condo association is attempting to cover on-going financial deficits. Inquire about what the condo fees are being used for.
#3: Complex is Low on Reserve Funds
Low reserve funds is usually indicative of the condo assoc. not having enough money to pay to repair and replace key components, such as exterior paint, parking surfaces, pool, lightning system, roof and siding If there isn’t enough on reserve, owners might be hit with a special assessment. Lenders will not make loans on projects not sufficiently capitalized.
#4: Special Assessments are Being Considered
In effect, a cash call from the ownership to build up a reserve account or pay for deferred maintenance. Inquire about anticipated special assessments not yet due by reading the minutes from the Board of Directors meetings. Chances are if they are talking about the need for a special assessment, its only a matter of time before it comes to pass.
#5: Unresolved Issues in the Condo Meeting Minutes
Occasionally, the meeting minutes will refer to an outstanding issue that has not been settled, such as, awaiting a repair quote. Inquire about the details and consider how the matter may affect your ownership position.
#6: Condo Documents are Incomplete or Illegible
These are the “operational manual” for the condo association. Failure to get current copies of the condo documents including the minutes to the meeting for the past 6-12 months could be indicative of poor management or even non-compliance with MA state law. Read the condo documents carefully. If you don’t understand them, consult a real estate attorney. Boston Real Estate Brokers may not offer opinions and interpret condo documentation as that is construed as the illegal practice of law without a license.
#7: Signs of Staining and Water Intrusion
A common sign of expensive repairs in the future. Even with newly constructed condominium complexes, water penetration around exterior windows, doors and decking due to poor workmanship is not uncommon. Construction defects can hurt the resale potential of the complex.
#8: Large Number of Resale Condo for Sale
Question why so many units are for sale. Ask the owners, not the builder or the Property Management Company for the real answer. Is there something about the complex that you would not like to learn about after you bought it?
#9: Financial Deficit – More Money Going Out than Coming In
Is more money going out than coming in? If so, it may be indicative of poor management and possibly an abundance of absentee owners. Lenders will not make purchase money loans to an condo association whose financial house is not in order.
#10: Low Owner Occupancy Ratio
Lenders want to see at least 65%-75% owner occupancy in the complex. The rationale being tenants don’t take care of property as well as owners do. And, to make matters worse, they often do not respect the By-Laws.
#11: Monopolized Ownership
Monopolized ownership results when one or two people own several units each and exert undue control over the voting. Inquire about the number of multiple unit owners in the complex.
#12: Unresponsive Board of Directors
When Board members neglect to return phone calls or email inquiries, maybe you’re seeing a management problem. Surely, there are good reasons for less than timely response, but a pattern of neglect is a warning sign.
Bonus Warning Sign: Unacceptable Restrictions
What is unacceptable to one person may be satisfactory to another. condo assoc. usually have restrictions about radio antennas, visitor parking, car washing and auto repair on the premises. Read the condo documents carefully, especially the CCRs, to determine whether you can live and abide by the rules. You’ll avoid much distress in the future.
Boston Condo You’re Considering Have One of These Warning Signs?
That doesn’t necessarily mean don’t buy the condo. It just means get the information you need to understand what type of complex you’re buying. Ask yourself, can you live with the restrictions imposed? When it comes time to sell the property, you’ll want to know what obstacles you’ll face. Work with a Realtor who is experienced in representing buyers of Boston condos. They’ll help you evaluate the condo and weigh the risks.
Ready to Buy a Condo in Boston?
Our team of experienced buyers’ agents know how to help you evaluate the type of condo you’re buying so you’ll have the highest chance of being satisfied with your purchase years later. We have a combined 60+ years of experience and take a consultative approach rather than the traditional sales approach. We believe you should understand what you’re buying so you don’t have buyer’s remorse. If you’re looking for a Realtor who specializes in buyers, check out our Boston Condo Buyers section to learn more about who we are and how we work. Call us at 617-595-3712 or email us to schedule a no obligation consultation.