Condo Buying Checklist

Check the Rules

When you buy a condo, you buy into an investment shared by all of the residents of the complex. That relationship is cemented by the CC&R -- the Covenants, Conditions and Restrictions. The CC&R governs just about everything in the complex, including whether you can have pets, whether you can paint your condo different colors and when you can have parties. Every condo complex has a group that enforces the CC&Rs, so it’s a good idea to review the document thoroughly before signing it. Once you do, there’s no turning back. You’re bound by that document.


Check the Finances

It’s a good idea to explore the financial health of the complex. Through a homeowners’ association (HOA), condo complexes take in fees every month from their residents. That money is supposed to go toward things like complex repairs and unexpected issues. Most condos also operate a reserve fund. Check to see whether the homeowners’ association has a sizable reserve fund, a cash surplus, a balanced budget or carries a debt. You can do this by requesting the complex’s bank records, service records and HOA meeting minutes.

Check the Fees

When you buy a condo, you’re not just putting out cash for the normal housing expenditures, such as a mortgage and insurance. You should also be mindful of extra fees that condos charge, such as maintenance fees (used for the complex’s everyday expenditures) and special assessment fees (which are usually charged in emergencies). Make sure you ask for information regarding the fee schedule, how they’re levied and the process by which they increase.

Check the Insurance

Take a look at the condo association’s insurance policy. When it comes to condos, you only own what is considered “your air space” (that’s the space inside your unit, nothing more). If your unit suffers damage and the complex is not adequately insured by the HOA, you’d get money to replace your personal effects, but not for the damage to your condo. In earthquake-prone areas like California, it’s important to find out if your condo complex has earthquake insurance. In the event that an earthquake damages the entire complex and your HOA doesn’t have insurance, you could end up losing your condo through no fault of your own if the bank must repossess the whole complex.

Check the Hassles

Ask your prospective neighbors about problems they’re having in the complex. Ask how quickly maintenance issues are resolved. Determine how much privacy you’ll have (how "thin" the walls are). Is the parking lot well lit and easily accessible from where you’ll be living? Are any of your potential new neighbors involved in disputes? Is the homeowners’ association involved in any pending lawsuits? All of these are good questions to ask when you’re determining whether the condo you’re looking at is right for you.