Thinking about bigger condo associations
Two or three unit condo associations (generally in formerly multi-family houses) have a condo board of two or three, with each unit having a trustee. In medium size associations, some maintain a one-unit-one-vote process -- with all the owners having a say in large repair decisions – and some elect trustees from among the owners. Large associations have elected trustees who are empowered to make some of the decisions for the association.
Whether there is an elected condo board or a condo board made up by all the owners, some associations hire a company to do common area tasks and manage repair projects. Other associations opt to do the work themselves or owners volunteer to supervise the people who do repairs for the common parts of the building.
I discuss these different types of condos with my buyers who are considering a condo. The space matters, but so does the decision-making process that manages the place.
On the business end of condos, things have tightened up some. Lenders are now more diligent about requiring real budgets and reserves. This is a change for the better. Condo associations are required to have reserves and are required to plan for expected repairs (like exterior painting and roof replacement.) Until things tightened up, I rarely saw decent reserves in small associations. When I started in real estate, it was not uncommon for a small association to be run out of a checking account. Both owners deposited monthly fees and one of the owners paid the water bill and insurance bill from the checking account. They would call one another if something needed repair. They met once a year, over coffee for their annual meeting. Bigger associations were not always run better. Yet, I did see better reserves, anecdotally, in the bigger associations. I also saw bigger special assessments when infrastructures items failed building-wide in these big buildings.
On the interpersonal end, there is people nonsense in all sized associations. The difference is that if you live in a small association, where each unit has a vote, you cannot withdraw from the fray. In a big building you can let go and let the squabbling happen without you – as long as you are willing to live with the outcome.
Lately, I have been working with young, professional women who are house-hunting for a condo in a medium to large association that is professionally managed. No small associations. No owner-maintained places. These women do not want to spend their time and energy in that kind of conflict – either with co-owners or with repair people. Is this is a trend or just a coincidence? What do you think?
Is the small condo association worth the hassle, so you can get the yard and the house-like feel? Or are big associations where someone else runs the show the better way to live?
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