Dave Dry

Condo documents why should I read them?

Condominium documents are a set of documents including bylaws, meeting minutes and financial statements relating to the condominium corporation.

 After receiving these documents I have heard clients say, thanks but you know I'm not going to read them, I'm not paying someone to read them for me and there are other people who bought here,that are more educated than I, so there can't be anything wrong. - Wrong these "smarter" people may have the same assumption as you. They may have found something in the bylaws or meeting minutes that did not concern them but may concern you.

 Now I have talked you into looking at the documents. Do you look at them or have your Realtor, a lawyer or someone else examine them?

 Your Realtor may say sorry thats really not my thing, and he is in all honesty not being lazy it really is not his thing. A real Estate lawyer may very well be comfortable looking at, and advising you as to the condition of the condominium corporation. There are also companies that look at and evacuate condominium documents. I encourage my clients to take the time to go through the documents themselves and also have a professional take a look at them. This performs two purposes 1) They become personally familiar with what is involved with being a member of a condo corporation 2) It may raise questions that you would like answered.

So what are we looking for? Like any corporation we want to know financial status, the condition of property owned by the corporation and whether the corporation is functioning well. The financial statements can tell if money is being spent responsibly, if for example is the management fee in line with industry norms? One of the most important documents in this package is the the reserve fund study this will tell how much the corporation expects to spend in the future and how much of the condominium fees should be going to day to day expenses, such as snow removal or lawn care, and how much needs to be going into a savings account (reserve fund) for future repairs and maintenance. A comparison between this and the financial statements can tell if the reserve fund, condominium fees and reserve fund contributions are in line with the reserve fund study.

Meeting minutes can tell us a number of things. Is the board working as a team with common goals. Is the corporation moving in a proactive manner or are there actions reactive. What are the problems in the building? What are the short term goals to deal with problem areas in the building? In a complete set of minutes you should be able to answer these questions.

 You would not buy a brand of car that you had never heard of without doing some research: so why buy property and an interest in a corporation without doing some research.

The money you spend to check out your new condo is well worth it. Some feel that if nothing is found in the documents to raise a red flag it is money wasted, and well spent something is found. If something is found to raise a red flag and the deal is not completed then it can possibly save you thousands of dollars and years of heartache and headaches. If nothing is found you have peace of mind and all your questions have been answered to your satisfaction.

Making your Real Estate needs my priority.

Dave Dry

Info@davedryhomes.com

780 446 3727