Congratulations! You’ve found your dream condo, ratified the contract, and now you’ve received a ream of documents known as the condo docs from your Realtor that contain an overwhelming amount of information. What is essential in the fine print? Don’t stress, follow this guide to understand the pertinent information.
What to look for
When you sign a contract for an existing condominium unit, you will be provided with what is known as the “resale package.” If you are purchasing directly from a developer, it will be referred to as a “public offering statement” or POS.
The condo association portion of the sales contract will specify the window of time the buyer(s) have, typically three to seven calendar days (depending on the jurisdiction) from the day you receive the package, to cancel the sales contract and receive a refund of your earnest money deposit.
In most cases, the condo package will include the bylaws and governing documents, the planned budget, any pending lawsuits against the management company, information about insurance policies, and lastly, an audit from an independent CPA. New residents should carefully examine the finances of the condo association to ensure that the association is financially sound and has enough reserves should unforeseen circumstances arise.
The condo docs will always start with an association declaration. This wording quite literally “declares” that the complex functions as a condominium. It explains the three components of a condo: the units, common elements, and limited common elements. It explains the ownership percentage associated with each unit (totaling 100 percent) and how the condo voting payments are comprised. The end of the declaration will provide each unit’s interest percentage.
A most crucial section to study and understand is the condominium bylaws. This section details how the board members are elected and what duties and powers they have once elected. This also describes important information regarding pets, parking, leasing costs, and condo fees and should include explanations about any interpretations of the bylaws according to the board. For instance, there might be specific rules about leasing your unit, or disposing of their pet waste.
Lastly, be sure to review the plat and plans document, often referred to as the “condo map.” This is a detailed architectural drawing that shows the floor plans of each unit and details general common elements vs limited common elements. General common elements are designed for everyone’s use, while limited common elements are reserved for individual unit owners.
Whether purchasing a single family home or a condo, because it’s a considerable investment that requires a lot of research it is essential that you do your homework and understand the details of all the documents you are given. Heller Coley Reed has the real estate agents with the expertise and knowledge to guide you through the nuances of those documents and through the process of purchasing your luxury condo. Heller Coley Reed has the best understanding of Somerset condos for sale, The Darcy, The Lauren, and Adagio, to name just a few of the luxury condo buildings in Washington DC, Chevy Chase, and Bethesda MD. Contact an agent at 240.800.5155 or send an email to hellercoleyreed(at)gmail(dotted)com.