Lessons learned in a condo deal
Buying a condo includes some different challenges than buying a single-family house. There are condo fees, condo associations, special assessments, and condo association rules to consider. In an established condo association, it’s usually a pretty routine matter to nail down those items.
But what about buying in an old apartment building that is being converted into condos?
One reader who recently wrote to me stumbled onto some problems when he purchased a converted condo in Boston over the summer. One of the most frustrating problems he faced was the fact that a board of trustees had not yet been set up, so there were questions about who to contact about repairs and other building issues. The buyer dealt with the property owner’s lawyer during the sale process, and the property owner was going to act as the trustee until 60 percent of the units were sold. (By the way, this was the property owner’s first time developing this kind of project.)
At the closing, the buyer still had some relatively minor repairs he wanted taken care of inside his condo and in common areas of the building, including making sure the lobby door would be fixed so it would close properly and getting the driveway paved. He asked the seller’s attorney for contact information for the seller at the close, and was promised that information. So he decided to go through with the closing, figuring these were minor issues that could easily be resolved. Eventually the buyer was given a post office box address to contact the seller and pay his monthly condo fees.
This proved to be a less than successful way to get repairs taken care of, and so the buyer pushed for more information. This time, he got contact information for a handyman and was asked not contact the seller’s attorney any more.
Relieved to get a handyman’s information, the buyer called him up, but was surprised to find the handyman didn’t really know anything about the property owner and he expected to be paid up front for any repairs.
This further frustrated the buyer.
Now in October, after a lot of legwork, the buyer has finally gotten many of his repair items addressed, but said he has learned some valuable lessons. Here’s what the buyer wrote to me:
“Looking back, I wish we had held off on the closing. That would have pushed the seller to resolve these issues ASAP. We gave him the benefit that everything would be done. However, not one issue was addressed without a number of phone calls and emails.
“If you could get two points across to your readers, one is to try avoid buying a condo where the board is not already in place. I would never do it again. The second point would be not to make any compromises at closing that make you feel uncomfortable.
“We covered all of our bases, but still really had no control. Things were done on his timeframe, not ours.”
Tomorrow, I plan to expand on this post a bit by writing about a few of the resources I found for condo buyers. In the meantime, what lessons have other condo buyers learned in the purchase process? What advice would you give someone interested in buying a condo? Would you buy a condo if the board of trustees wasn’t in place yet?
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