I’m getting ready to inspect my first condo. Is there any reason to inspect the exterior grounds since the new owner isn’t responsible for the maintenance and its a public area?
Hi Brian…Condo’s are my specialty.
First I will tell you not knowing what you know that a lot depends on the situation.
If you are lowballing you can do a basic between the walls and get away with it by attaching a ryder in your contract at the bottom taking responsabilty for common areas off your hands and the axe from over your head.
Now as far as I go,I will especialy with smaller buildings get on the roof and go over the common areas.You might think this is up to the condo board and almost sounds like a reserve study.But anytime money is spent on special assesments this comes out of your clients pocket.
Now tomorrow I am doing a large expensive,well established High Rise and there is no need for me to focus on common areas as this would be redundant.50 or so stories tall and right on Lake Michigan they have things well in hand and the lawyer for my client has more of a job looking those spots than I.
If you need any other help shoot me an E-Mail.
Thanks for the info Robert. This helps a lot!
Does anyone recommend their clients talk to the management company to find out what the maintenance schedule is. Also what is in the agreement to handle major repairs that are not included in the agreement.
Living on the seacoast of NH I have seen this more than once, the condo I inspected today was built in the 80s and for the last 6 years owners have had to pay anywhere from 1800.00 - 2000.00 per month for ongoing repairs.
These buildings were covered in vinyl siding and most of the windows/trim are leaking and will cost thousands to fix.
This inspection was for the seller who now lives out of state and is at the mercy of the association and can’t sell.
I always tell my client to ask for board meeting minutes and reserve funds.
Some may not wish to get this involved,but it is always bettor to help as much as you can.
You know more and should be looked at as a go to guy if you wish success.
Bob your absolutely correct, many inspectors think that because the association deals with the exterior of the building it will not affect the client.
In reality it usually will, it is a misconception about condos that have hurt many buyers in my area. They think they are buying just the interior, from the Sheetrock in and the association owns the rest. This inspection has the owners, who are responsible for windows against the association who owns the structure.
So, in this case who is responsible for the damage, the owner of the window or the owner of the structure which is rotted, which by they way none of the repairs can be completed without each party agreeing on responsibility.
This is why I explain to all my condo client’s that they need to do their due diligence with every aspect of the purchase, not just the inspection.
Here in California 12 months of meeting minutes, financials and the CC & R’s are all provided to the buyer through escrow in the form of disclosures. I work with a lot of agents who also ask the owner to pull a copy of the HOA service history on the subject unit. Some very interesting information shows up sometimes. Obtaining a current copy of the “CLUE” insurance claims database report is always a good idea, weather the property be a condo or a commercial building.
If the condo is ground floor I’m always looking at the exterior, as problems outside can impact my focus area on the inside…
Yeah …Every Condo has a different set of circumstances and you need to adjust your report to reflect the seperate concerns if you wish to make the client happy with your work.I normally hear thank you for being through.
I bet they never get those reserve funds! Sorry, Robert. Couldn’t help myself this late in the morning. Haven’t had a nap yet. :margarit:
Well, not in all parts of California. Here in San Diego, it seems that nothing is provided through escrow or on disclosures. The Client has to ask for everything. Even Realtors don’t get those anymore, although perhaps the reason why Jim, my Domestic Partner and a Realtor at Century 21 Award, is so successful is because I convinced him to go to all 40 condo associations in Mission Valley, get a copy of their minutes, financials, and CC&R’s and become familiar with them. He did, so whenever he has a listing appointment, he knows more about their HOA than the seller does who has lived there for 20 years.
I never put anything about the exterior in my report because it intrudes into the jurisdiction of the HOA. However, I won’t ignore something either, just having to handle it verbally. For example, back in June 2004, I did a condo inspection where all the roofs were wood shingle. After the October 2003 fires, everyone was replacing wood roofs. So I pointed it out to my Client and told her to check with the HOA to see if there were any special assessments to pay for replacing the wood roofs. Indeed, there were! She found out that all owners of record on July 1, 2004, would be assessed $10,000 to replace the wood roofs throughout the complex. Guess when she was due to close escrow? Yep. June 30, 2004. So the very next day she would have owed another $10,000. She canceled the purchase. That didn’t come through any type of disclosure or through escrow or through the Realtor. It came via me being helpful.
Give me a break Russ.You know I am a primitive caveman.
And I still haven’t had a nap yet. I’ve been inundated by NACHI members with requests for property investor groups so they can do WALK inspections.
From Prudential California Realty:
**At what point in the real estate transaction will I be allowed to review a copy of my CC and R’s and Bylaws? **
Legally, it is the responsibility of the owner to provide the prospective purchaser with the governing documents of the development (CC and R’s and Bylaws), the most recent financial statement of the homeowner’s association and notice of any dues delinquent on the unit.
The law states that these items should be delivered as soon as practicable; however, the prospective buyer should request to see them as early as possible. If you do not fully understand what is stated in these documents, consult a real property attorney.
From California Association of Realtors:
HOA Disclosures (AB 2100): This new law amends the Davis-Stirling Act—which regulates common interest developments—to require additional reporting on reserves for a common interest development, and to extend disclosures for self-dealing by homeowner’s associations (HOAs). Specifically, this law requires (1) the pro forma operating budget to include any deficiency in reserve funding on a per unit basis, (2) a statement from the HOA when the HOA defers or decides not to repair or replace major components, (3) a statement of any outstanding loans by the HOA, (4) a plan indicating how the HOA will fund any deficiencies in reserve funding, (5) distribution of the reserve funding plan to all members. The first four provisions went into effect on January 1, 2007, but the last will not go into effect until January 1, 2009.
Thanks, Will. As my wise ol’ grandmother said, “I learned something today.”