Condos are a community form of ownership where you own a “unit” within a larger building or complex shared with other condo owners. You and your neighbors may be in close proximity, possibly sharing walls and amenities.

Unlike single-family homes, condos share common elements, amenities, and often walls with other units. Condo owners typically own only the interior of their unit, while exterior elements and common areas are maintained collectively by the HOA.

You own the interior of your unit, and you and the other condo owners and the other condo unit owners jointly own the exterior property, recreational amenities, and other common areas in the building or community.

A townhome is a design style which could be a condo or a PUD, it’s all based on the legal description and how that community wrote their declarations.

A standard condo inspection will only cover the interior of the unit. Buyers should also investigate:

• Recent building-wide structural, electrical, or plumbing inspections
• Whether a reserve study was completed within the last 3 years
• HOA meeting minutes for red flags about upcoming repairs or conflicts

Typically, the HOA manages exterior and common area maintenance. Interior repairs are the owner’s responsibility, unless otherwise outlined in the bylaws.

They can be but, with proper preparation and the right documents gathered upfront, the process doesn’t have to be difficult. If you have the right experts in play, it makes it less complicated for a buyer.

• Are there any structural issues ? What are your repairs that are happening right now?
• Are there any pending assessments or major repairs planned?
• How are they handling repairs within the community?
• Make sure we put in a due diligence period in the contract to allow time to explore all questions about the condo – i.e. how are they handling issues in the community?
• Review HOA meeting minutes to look for major issues or trends

• Set realistic expectations about the financing and approval process.
• Collect HOA documents upfront (budget, financials, meeting minutes, insurance).

• Understand that you are responsible for the UNIT and a PIECE of everything else in the community? If repairs are needed throughout the community, there could be extra expenses that you share with the other condo owners
• Understand the difference between Condo Fees (general upkeep) and HOA Fees (can include shared utilities, amenities, and services).
• Understand the HOA’s financials, including reserve funds and budget stability.

A fund set aside for replacement of common property in a condo project. The amount of the fund is typically determined by periodic reserve studies conducted by experienced professional reserve analysts.

A one-time fee or additional condo dues that condo owners pay to cover unexpected expenses that are not covered by regular maintenance fees. These fees are in addition to the normal, recurring common element fees/expenses.

• Buyers typically need an HO6 insurance policy, which covers the interior of the unit.
• The condo complex should carry a Master Insurance Policy, including:
  • Property Insurance
  • Liability Insurance
  • Crime/Fidelity Coverage
• Flood Insurance, if applicable

• Warrantable condos meet Fannie Mae or Freddie Mac guidelines and are easier to finance.
• Non-warrantable condos do not currently meet Fannie Mae or Freddie Mac guidelines and may require additional documentation to finance.

• You now have to think about others and all shared responsibilities within the condo project.
• Exposure to special assessments
• Rising HOA fees

Limited Review: A less invasive review of the project. Fewer documents are needed. Typical questions include:

• Is the HOA involved in any litigation?
• Does the HOA have a Master Insurance policy (Property, Liability, Crime/Fidelity)?

Full Review: A more in-depth review of the financing and project to ensure the buyer can comfortably own the property.

• HOA litigation status
• Number of units 60+ days delinquent
• Approved current budget
• Balance sheet within the last 90 days
• Master Insurance documentation

Loan financing terms will require your lender to evaluate several factors to assess the financial stability and physical condition of the condo project, community, or building you are considering.

Buyers should verify whether the HOA is involved in any litigation, which could affect financing and future expenses.

This varies by location. Some states, including Florida, have passed laws requiring regular structural inspections and reserve studies following incidents in aging buildings.

No, there is not a “blacklist” for condo projects . Our dedicated Condo Team is here to navigate the most difficult condominium projects.