What is A Condo Association?
This is a question often under-looked by Tulsa, OK, condo buyers. Condos may provide great bang for the buck, inexpensive amenities and low-maintenance, but this is accomplished through all of the homeowners in the building working as a cooperative. Often, condominium buyers do not give enough consideration to the quality of the Condominium Homeowners Association.
My first piece of advice, find out if the association has completed HUD approval. Click here to read more about HUD Approved Condos.
Not All Tulsa, OK, Condo Associations are Equal.
Many Tulsa, OK, neighborhoods have a Homeowners Association, or HOA for short. They are designed to maintain “standards” for the development and keep the neighborhood in good repair. The developer of the neighborhood typically funds the HOA, establishes the association with the rule and regulations it will uphold, and then hands it over to the homeowners as properties are purchased. Some neighborhood associations are strong and highly involved in the maintenance of the neighborhood, and some are more social, used to promote the community. And all the while, many other Tulsa, OK, neighborhoods maintain themselves beautifully without the help from an association.
Condominium Owners Need Associations.
A condominium will always have any association, and it always needs to be strong. Condominiums share significant amounts of commonly owned property, such as the roof, parking, landscaping and many other common areas. Each owner exclusively owns their individual unit, but the elevator, swimming pool, and other building amenities required shared maintenance. When you buy a condo, you are entering into an agreement with all other owners in the Condo Association. All association members agree to upkeep their individual unit and to additionally contribute to upkeep of the shared property. This provides an economy of scale, and shared costs can provide for very inexpensive benefits. But if you condo association is weak, you can find your condo association difficult.
How Do You Know if a Condo Association is a Good One?
Well, you have to ask questions:
What are the condo association rules? Your parking spaces, swimming pools and patios will all be governed under the condo association rules. If having pool parties is important to you, ask for the rules.
- How much are the condo association fees? Fees vary by community and may cover vastly different items. Ideally, fees help all association members acquire benefits less expensively then what they would get them for individually. Possible considerations may include maintenance of the building, insurance of common areas, utilities, amenities, etc. The point here is to ask and to understand what the cost is and what it includes.
- Is the condominium complex professionally managed? You will want to ask for the contact information for whoever runs the property. It is important to identify who fixes what. Contact the property management staff or the HOA for all of the information you will need.
- How much money is in the reserve fund? Generally, you will want to see 15% – 30% of annual expenses in a reserve fund. The older the building, the more the maintenance, and the more you will want in the reserve fund.
- What is the Condo Association’s history regarding special assessments? These are a one time fee used to cover an unexpected or large expenditure. If it cannot be covered by the budget or the reserve, a special assessment is required.
Is there any pending legislation against the condo? I know of at least on Tulsa, OK, condominium association that is currently encumbered with a lawsuit. A lawsuit may impact all homeowners.
- What is the Condo Association’s rental policy? A high number of renters can have a negative impact, and many lenders are more reluctant to to give loans on these types of complexes. Most lenders look for at least two thirds owner occupancy.
Tulsa, OK, condominiums have appreciated at a higher rate than single family homes over the last 2 years. But this is mostly due to the fact that during difficult economic times (2008-2011), they depreciated faster as HOAs scrambled to absorb foreclosure losses. If too many units stop paying association dues, the association’s budget falls apart quickly. They may offer advantages to home buyers such as affordability, the need to downsize or possibly not wanting to have the maintenance issues of single family homes. But before buying a condo, make sure you know who you will be partnering with and what the rules are.
Copyright 2014 John Regur All Rights Reserved – Originally posted at: Tulsa Oklahoma Midtown Mortgages – John Regur