Real Estate By the Numbers

Buying a Condo in Boston? Some things you need to know.

Chances are if you are looking to buy a home in Boston, and many of its suburbs, condominiums will be part of your home search. Condominiums offer an excellent alternative to a single-family home, especially if you want maintenance free living. If you are starting your search, or you are a seasoned open house visitor, you should be familiar with the lingo associated with condominiums.

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A Condo, often referred to as a “unit”, is the physical space owned in the condominium building by an individual owner. The body that governs the condominium is the condominium association, or “Association.” Most associations in Massachusetts are governed by a Trust. The trustees are elected, or appointed, as set forth by the Condominium’s Declaration of Trust.

Condominium documents, often called “condo docs”, establish, set rules and maintain the Condominium. Comprising these “docs” are the Master Deed, Condominium Trust, the By-Laws, the Rules and Regulations, and the Condominium Budget. The documents tell you things such as if you can rent your condo, if pets are allowed, if the building is smoke-free, if the condo unit comes with parking or storage, along with a multitude of other guidelines.

When purchasing a condo, it is wise to consider the condo fees and what those fees cover. These are fees that are paid monthly to the condo association. In addition to your monthly mortgage payment of principal, interest, taxes and insurance, the condo fees will be part of your total monthly expenses. When thinking about a monthly budget, your condo fees will play a big part of your purchasing power, depending on the amount of the monthly fee. Unlike your mortgage and interest payments which you pay down, condo fees remain payable every month for the time that you own the condo and tend to increase over time as expenses rise.

Depending on the size of your condominium association, the fees may cover the bare minimum, such as master insurance and common expenses such as water, sewer and common space electricity charges. In larger associations, the fees will also cover common area maintenance and cleaning, snow removal, landscaping, reserves for future improvements, and a professional management company. In some associations, heat is included in the condo fees.

Reserves are an essential part of a condo budget. Reserves are built up to cover future improvements, capital expenditures and repairs. Typically, a portion of the monthly condo fees go towards the reserves. Pursuant to FNMA guidelines this is typically 10% of the overall budget. If the condominium building or its systems are older, then you want to know the amount the association has in reserves to cover these future capital expenditures. For example, should the roof need to be replaced, reserves would cover that improvement.
If the reserve balance is inadequate to cover the cost, then each unit owner will be assessed a sum to cover those costs. This is called a special assessment. The amount assessed to each unit is based on the unit’s percentage interest in the association which is established in the Master Deed at the time the Condominium was created. The Condominium Trust will address the approval process for assessments. If there is already a special assessment in place, be sure to negotiate which party will be paying that expense before the signing the Purchase & Sale Agreement.

Before signing the Purchase and Sale Agreement, request the condo budget from the trustees or Management Company. Your attorney should be helping you review all of these documents and advising you on the legal rights and obligations you will have once you purchase your Condominium. Together you will determine what the fees cover and look closely at the budget and reserves.

Condo living is ideal for those who are looking for hassle free living. They require little or no maintenance on behalf of the owner because the association handles the headaches of repairs and upkeep, leaving you time to enjoy your home.

Karla Heine Goodale is a real estate attorney with Lieberman Law Office P.C., with offices in Newton, West Roxbury, Braintree, and Shrewsbury. You may contact her with real estate related legal questions at (781) 235-3200 or e-mail him at To read all posts by Lieberman Law Office click here.

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