Condominiums & Townhomes - Q & A
Q: How does one choose between single family homes and condominiums?
A: According to experts, in some areas condominiums have been just as profitable of an investment as single family homes in the last five years. In some markets condominiums have appreciated even more.
Most home buyers prefer to invest in single family homes, however, due to demographic changes condos are increasing in popularity. Especially among single home buyers, first-time buyers and empty nesters in the high-priced markets.
In the last few years the condominium community has worked hard to overcome developer disputes, image problems brought on by the homeowners association and frequent construction-defect litigation.
Q: Is it risky to purchase condominiums?
A: Condominiums have never had the kind of appreciation experienced in the 1980s by single-family homes, however, experts say they have not lost value. With more single home buyers in the market and high prices in many urban markets than ever before, the market for condos has indeed strengthened. Make sure to do your homework, as with any home purchase. You should find all there is to know about the neighborhood by conversing with other homeowners in the area. When it comes to condominiums you want to be certain to review the past six months of homeowners association minutes just to see how effective the board is. You also want to learn about any detracting issues (such as protracted litigation with the developer).
Condo Associations are taking steps to prevent legal problems and disputes and have become more sophisticated in regards to property management.
Other resources:
* Community Associations Institute, 1630 Duke St., Alexandria, VA 22314; (703) 548-8600.
* "The Condominium Bluebook," Branden E. Bickel, B&B Publications, San Francisco, CA; 1993.
Q: Is it required for condos to be made accessible to the disabled?
A: According to The 1990 Americans with Disabilities Act, residential apartments and single-family homes do not have to be accessible to the disabled, however, all new construction of commercial projects or public accommodations (such as shopping malls or government buildings) must be accessible to the disabled. Also falling into this category are new construction of multi-family homes.
People with physical or mental disabilities are protected against discrimination in all states by the Federal Fair Housing Act. This includes the refusal to make modifications to buildings which are not accessible to the disabled.
Two educational brochures, "Housing Rights" and "Discrimination is Against the Law," are available through the Department of Fair Employment and Housing by calling (800) 884-1684.
Q: Can condominiums restrict smoking?
A: Smoking can be restricted by the homeowners association's board of directors if it is applied to indoor common spaces such as; recreation rooms or hallways. Legal experts say, outdoor spaces are an entirely different story. The only way a homeowners association could ban smoking in outdoor spaces is if a
city banned it first. The board is given authority, by codes and restrictions (CC&Rs) and typical covenants which govern condo associations, to create and enforce reasonable rules for the use of common property. These rules however do not apply to the interior spaces owned by the smokers themselves.
Resources:
* Common-interest development brochure available free from California Department of Real Estate, Book Orders, P.O. Box 187006, Sacramento, CA 95818-7006; (916) 227-0938.
* Various Internet sites specializing in common-interest developments, such as those operated by the Community Associations Institute and CIDNetworks.
Q: Do condo associations have the authority to ban nudity?
A: Condominium communities are considered private property, the balcony of your condominium however is not. Therefore, you cannot sunbathe in the nude on your balcony. It is common property that has been assigned to your exclusive use but it's considered a common area nonetheless.
The activities that can and cannot be conducted are decided by covenants, codes and restrictions (CC&Rs). There are some condo associations who take it one step further by preventing people from having barbeques on their balconies as well as hanging plants upon the railings. Personal conduct regulations are not clear-cut it literally depends upon which side of the fence you happen to be on.
Legal experts say, if a person sunbathing upon their balcony is visible from a public vantage point and not by someone peering through binoculars or someone who must climb a tree, then the rule most likely would be considered reasonable. There are some condominium communities where nudity is tolerated, but again, it must be out of public view.
Q: Do condos hold their value as an investment?
A: Despite problems with some associations and economic downturns, condos have indeed held their value.
Experts say, over the last few years, condominiums have appreciated more than when they first arrived on the scene in the late 1970s and early 1980s. The condo industry has worked very hard to turn its image around against reports of homeowners association disputes and construction-defect problems. These days elected volunteers who serve on the association boards are better trained when it comes to handling complex budget and legal issues to avoid the kind of protracted litigation that has hurt resale value in the past.
Condominiums have also become attractive investments for single home buyers, empty nesters and first-time buyers in expensive markets due to the changing demographics.
Q: Where can I find more information regarding condo association laws?
A: Resources:
* "The Condominium Bluebook" by Branden E. Bickel, B&B Publications, San Francisco, CA; 1994; call (415) 433-1233).
* Community Associations Institute, Alexandria, VA; (703) 548-8600.
Q: Is there any more information on condos available?
A: The best source of information regarding condominiums is, the major interest group for condominium projects and other so-called common-interest developments, called the nonprofit Community Associations Institute,1630 Duke St., Alexandria, VA 22314; (703) 548-8600. Also, check the Internet where CAI operates an informative site as does CID Networks.
Q: Are one-bedroom condominiums as good of an investment as a condo with two bedrooms or more?
A: One-bedroom condominiums have proven to be good investments only in high-cost markets such as the San Francisco Bay Area or Manhattan. Historically speaking, however, they are not equally good investments as condos equipped with two bedrooms or more. This is rapidly changing due to the fact that the demographic trends are changing and the fact that there are more single home-buyers in the market today. The demand for one-bedroom condos is on the rise.
Q: Before buying, how do I find all there is to know about the homeowners association?
A: When you reach the decision to buy into a development, governed by one, be sure to learn everything you possibly can about the homeowners association. Your investment relies upon the association's financial, political and legal conditions, they play an important part in your investment and quality of life.
The common grounds are usually maintained by the homeowners association when its run in a proper fashion. Civility is kept within the complex as well. Property values can be dragged down if the association is poorly managed which makes living there quite difficult for residents. Your privacy will not be intruded upon, nor will you pay hefty amounts in association dues, that is if you follow the rules. Make an effort to study the association's covenants, codes and restrictions (CC&Rs), to find out if you can live by their rules. If after a certain hour loud music is prohibited, this may not be the place for you if you prefer to play your music late at night. Do not move into a condominium community thinking that you can defy the rules and get away with it or make an attempt to change them down the road, for you may be up against determined neighbors who are firmly in control of the association board.
Another thing to consider is finding out all there is to know in regards to the association's finances. Find out if the dues are expected to increase and if there are any assessments planned. In addition to this, review the budget, meet with with the association treasurer and ask if inspections have revealed problems with plumbing or roof leaks which may increase dues or require a special assessment later on.
Arrange an appointment to meet with the association president. If the president appears more interested about gossiping about the residents as opposed to maintaining the property, this may not be the right condominium complex for you if you are the type who frowns upon intrusions into your private life.
You may want to speak with the residents of the condo complex in order to get their views upon the association's finances, its property manager, how the condo complex operates and if there are any politics. Like a mini-government, condo associations are volunteer organizations with elected boards, so it is possible for politics to enter the picture and ruin what could have been a good thing.
Most importantly, you want to take the time to understand how homeowners associations conduct their business and how they are organized. When it comes to real estate investments, the more information you know the better off you will be in the long run.
