Originally Posted By: afernbaugh This post was automatically imported from our archived forum.
I know that this subject may be an old one to some of you, but here goes…When you inspect a condo without benefit of the condo documents being available; what do you assume to be common element and what is private??
I am fairly familiar with condo law as it pertains to high rise buildings, but what about “townhouse” type units??
Originally Posted By: gbeaumont This post was automatically imported from our archived forum.
Hi Alan & welcome to the message board.
To be honest I think without the condo contract you would have to treat it as a single family house and do everything that you normally would. The Condo area is getting to be something of a "hot potato" as their are many documented cases of condo buyers finding problems after they move in that had been hidden or masked buy the previous owners or condo association, perticularly related to roofing issues. here's some reading for you:
Originally Posted By: Bob Sonneson This post was automatically imported from our archived forum.
I look at a condo in the same terms as a single family home. My client needs to be aware of any problems that exist. With that knowledge they can determine if funds are available to correct common area problems or may there be a special assesment coming there way.
Originally Posted By: rray This post was automatically imported from our archived forum.
I pull a copy of the public records.
If it states "SFR," then I have a single family residence with the homeowner responsible for everything. There might be a homeowners' association involved, but it typically only takes care of street landscaping, lights, etc., and the monthly dues are low.
If it states "Condominium," then I have a condominium with, according to the public records, a condominium association in place. I inspect it as a condominium.
There are many times that I have what looks like an SFR but public records indicate that it is a condominium. I don't care what it looks like. I inspect according to the public records. That provides me with consistency and precludes me from intruding into the jurisdiction of the homeowners' association, which case law indicates can get touchy in California and San Diego County.
If you are up front about what you do and what you don't do, what you can and cannot do under the laws in your state, county, city, or jurisdiction, typically you will have no problems.
Public records are wonderful documents. That could be by Realtors rely so heavily on them.
Originally Posted By: afernbaugh This post was automatically imported from our archived forum.
Gerry, Joseph, Jeff, Bob, and Russel,
Thanks for your insight. The consensus is that (unless local laws preclude) I should treat a condo as an SFR but note any systems or component that could not be evaluated and advise the client appropriately.
The condo I inspected last week was one of 150 or so units on a 10 acre plot consisting of about 20 or so buildings. I noted all of the site and exterior systems including the roof system and its penetrations of the building containing the unit in question and stated that these were the sole responsibility of the condo association. I then reported on the interior, plumbing, electrical, HVAC, etc.,as per SOP.
If we are to consider the level of reserve funding for the association versus the apparent condition of the systems the association is responsible for, it seems we are responsible for researching not only public records but the books, reserve studies, and maintenance funding annually, of the association in question, and possibly more.
That being said; I notice as I compare local and regional pricing of condo inspections that they are routinely less(much less) than a single family residence, but with a lot more responsibility as stated here.
This just doesn't add up to this old southern boy! Where am I getting "off track" here. Do our SOP's accurately reflect the current situation regarding condominiums??
Regards,
Alan Fernbaugh
Five Star Inspection Services
Baton Rouge, La.
Originally Posted By: afernbaugh This post was automatically imported from our archived forum.
Joseph,
Excellent point! Not to be argumentative but, what about the other 19 or so buildings on the complex? Where does our responsibility stop if we aren't privy to the condo documents?
Originally Posted By: rray This post was automatically imported from our archived forum.
Out here, price definitely is not the same for a condo and an SFR. Realtors and the public understand why. My condo prices right now are $40 less than my SFR prices, soon to be $45 less.
Here we do report that something is someone else's responsibility because public records indicate that it is. And we have a lot of case law indicating that homeowners' associations get really p***ed off when anyone at all intrudes into their jurisdictions. Condo associations are very rich and powerful here. So when the public records tell me that something is the condo association's responsibility, I and the Realtors don't have any problem telling the Client that. I share public records (they are public, after all) whenever necessary.
Now if I'm walking up to a condo and notice a hugh crack in the wall or a roof that is falling down around me, I don't ignore it, but I sure don't put anything down in writing. I point it out to my Client and tell them and their Realtors to check the condo association records (bylaws, minutes, budget, etc.), which also are public in this state.
Again, it comes down to several things, some of which are what your competition does, what you want to do, and what the laws in your area allow you to do.
Originally Posted By: afernbaugh This post was automatically imported from our archived forum.
Russel and Joseph,
I will follow the wise advice of my mentors on here. But, it seems to me that the whole industry of home inspection needs to look at condominiums and come up with some standards and definitions to better equip all of us. There is just a lot of exposure for us here in what could be the fastest growing segment of homes here in the southeast.
I guess the key to reducing our liability is in reducing the scope of the inspection in the inspection agreement and getting agreement from the client about the reduced scope.
Originally Posted By: Richard Stanley This post was automatically imported from our archived forum.
I inspect the interior, electric, plumbing fixtures, hvac, built in appliances, etc. I do not inspect any common area and say so in the report - example: Roof - not inspected- common area. As far as the structure goes in a condo, the “owner” owns only the space between the walls, ceilings and floors. There are some exceptions in townhouses.
Originally Posted By: rray This post was automatically imported from our archived forum.
Alan Fernbaugh wrote:
But, it seems to me that the whole industry of home inspection needs to look at condominiums and come up with some standards and definitions to better equip all of us. There is just a lot of exposure for us here in what could be the fastest growing segment of homes here in the southeast.
I guess the key to reducing our liability is in reducing the scope of the inspection in the inspection agreement and getting agreement from the client about the reduced scope.
I haven't read any SOPs lately, but I seem to remember that the industry has come up with some standards and definitions.
As far as reducing the scope of the inspection in the inspection agreement, I have several different agreements, one for condominiums, one for R1-4 (SFR, duplex, triplex, fourplex), one for multifamily (2-on-1, 3-on-1), one for R5-50 (commercial residential), and one for commercial (stores, malls, condo towers, etc). That's why the pricing is different.
Originally Posted By: rray This post was automatically imported from our archived forum.
Alan,
How come your LSU Tigers keep refusing to play my Texas Aggies in football on a home-and-home basis? Just because we won a couple of games the past couple of decades?
Originally Posted By: jmyers This post was automatically imported from our archived forum.
Russel,
You have hit a rather alarming note for me. Are you saying you would not report a large crack in the foundation just because it is the responsibility of the association? Using that simple common sense approach of mine, I would tend to think this would or could have an impact on the property they were purchasing, wouldn't you?
If you were to take an unsafe common space that the buyer has access to, would you not then report any safety issues that were found in that area?
Are you saying that the crack would be well documented and the recommendations for repair, or lack of, made public?
Originally Posted By: afernbaugh This post was automatically imported from our archived forum.
Russel,
Texas A%M and LSU have had a great rivalry for many years but since A&M joined the Big 12 and LSU has to play 9 SEC games each season they have chosen, it seems, to wait for the occasional Cotton Bowl games. Sad, but true. “Gig um Aggies!”
Joseph,
One thing that no one has commented on is the larger issue of what to say or do about the entire condominium complex. In my example I inspected only one of 150 or so units contained in only one of 20 or so buildings. Assuming that, even in the best case, the potential owners of this one unit soon will be liable for 1/150th of the maintenance costs of the entire complex. Who discloses this to the buyers? The new owners are buying a unit(no matter what we exclude) and an undivided equity and liability for the entire complex.
Are real estate agents required to disclose the potential risks to their clients? Should we make a comment on our report on this issue or just
exclude the matter entirely? Do appraisers look into these issues?
Regards to both of you, and thank you,
Alan Fernbaugh
Five Star Inspection Services
Baton Rouge, La.
Originally Posted By: rray This post was automatically imported from our archived forum.
Joseph Hagarty wrote:
The competition here charges full price for condos as a condo inspection takes the same time period to perform as a SFR. I followed suit and raised prices after my work schedule filled out.
You also have to be careful in your definition of a Condo as it may be a 600 square foot efficiency within a hi-rise or it could be a 4000 square foot semi-detached with a 2 or 3 car garage. One man's Condo is another man's Castle.
Russel:
Public documents only give you so much information. They will describe the type of Condo Association but not the nuances within the governing documents delineating maintenance responsibilities. I do not research the documents as I am not getting paid for that. That is what the Attorneys are for.
1. Always know what your competition is doing, especially if you are new to the business. I shop my competition quarterly and raise my prices every month.
2. One man's condo is probably his castle and not someone else's castle.
3. I don't define a condo. I let the public records define a condo. That way it doesn't matter what it looks like, how big it is, how many cars the garage holds, or whether the buyer/Realtor thinks it's a house or a condo. A condo is a condo is a condo here. In light of our governor recall circus, maybe the public records is one of the good things about California. There is no confusion about what is and what is not a condo.
4. If public records define it as a condo, that means that there is a condo association in place that takes over maintenance responsibilities. If there is a homeowner association that maintains streets, lighting, landscaping, etc., then it will say anything except condo. In every instance where there has been a dispute (Realtor was not prepared), all I have to do is ask, "How much are the monthly association dues?" The answer tells everyone all they need to know. $375 means the association maintains the structures. Again it doesn't matter how big the structures are or whether or not they look like houses. $50 means the association pays for the guy to come mow the lawns every week. In every case, the public records have been proven right (and the Realtors and Clients love me), but I knew this before I ever got into business because I checked out the competition's prices and saw condo/SFR prices and I had attorneys tell me what was going on.
5. I have very good real estate attorneys that I pay well for. They do the research on case law, legislative law, and anything else that affects me as a home inspector.
6. I use the public records to prepare properly for a home inspection. Due to the size of San Diego County, it's impossible for me to do drive-bys the night before like some of my company's franchises do. As a former property renovator, the public records provide me with a lot of information. I've often been able to confirm information that a Realtor has or convey information that a Realtor does not have. Realtors love me because I come prepared.
For example, if the most recent sale was 1978, I can reasonably assume that there will be a lot of deferred maintenance and/or furnishings and/or storage since the people have lived there for 25 years. Those conditions mean more notes, more pictures, more time. I budget my time appropriately and schedule appropriately.
If I see that the most recent sale is June 1, 2003, and, prior to that, 1978, I know that there was 25 years of deferred maintenance, that someone bought it on June 1, spent six weeks fixing it up, and is now flipping it. It probably is vacant. Those conditions mean fewer notes, fewer pictures, less time. I budget my time appropriately and schedule appropriately.
The public records help me with budgeting and scheduling in 99% of all cases. There is that one that escapes because the people are not typical. For that one that requires more time than budgeted, I'll send my inspector off to start the next inspection, I'll finish the current one, and then I'll join him at the next one. Realtors love us because (except for the 400 SF condo), I always send two inspectors.
Because of disclosure laws, knowing how long the current residents have been there also lets me put some of my California liability off onto the sellers. For example, a few days ago I did a slab house. Copper water pipes had been run along the ceiling in the garage and at grade outside.
This typically indicates two things to me: attic polybutylene pipe replacement or a leak in the pipes running through the slab. No disclosure from the sellers, but this was not standard water pipe routing for this type of house in this specific neighborhood for this type of foundation. House was built in 1978 and sellers were original owners. Something's fishy. I talked this over with my Client and his Realtor and said that I believe we need some seller disclosure here. They both agreed, and they both were angry that full seller disclosure had not been done here. Everyone out here (except me) gets really upset when full disclosure is not done. I like it because it puts my liability back on the seller, where I think it should be in the first place.
