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Are condominiums risky to
buy?
ANSWER: While condos never had the kind
of appreciation experienced by single-family homes in
the go-go 1980s, most ultimately have not lost value,
say some experts. And with high prices in many urban
markets and more single home buyers in the market than
ever before, the market for condos is strong. As with
any home purchase, you should do your homework about the
neighborhood or development before you buy. In the case
of condominiums, it is important to read the past six
months of homeowners association minutes to see how
effective the board is and to learn about any possibly
detracting issues (such as protracted litigation with
the developer). The condominium community has worked
hard in the last few years to overcome image problems
brought on by disputes and lawsuits. Associations are
becoming more sophisticated about property management
and taking steps to prevent legal problems and disputes.
Other resources:* Community
Associations Institute, 225 Reinekers Lane, Suite 300,
Alexandria, VA 22314; (703) 548-8600; caionline.org.
* "The Condominium Bluebook," Branden E. Bickel,
Piedmont Press; 2003; condobook.com.
Are condos a good investment?
ANSWER: Condominiums have held their
value as an investment despite economic downturns and
problems with some associations. In fact, condos have
appreciated more in the past few years than when they
first came on the scene in the late 1970s and early
1980s, experts say. While there are lots of reports
about homeowners association disputes and
construction-defect problems, the industry has worked
hard to turn its image around. Elected volunteers who
serve on association boards are better trained at
handling complex budget and legal issues, for example,
while many boards go to great lengths to avoid the kind
of protracted and expensive litigation that has hurt
resale value in the past. Meanwhile, changing
demographics are making condominiums more attractive
investments for single home buyers, empty nesters and
first-time buyers in expensive markets.
Are one-bedroom condominiums a good investment?
ANSWER: One-bedroom condominiums
historically have not been considered as good an
investment as condos with two bedrooms or more. But in
high-cost markets, such as Manhattan or the San
Francisco Bay Area, one-bedroom condos have proven to be
equally good investments. Helping that along are
changing demographic trends. With more single home
buyers in the market today than at any time in history,
there is more demand for one-bedroom condos.
Can a condo association ban nudity?
ANSWER: Could you sunbathe in the nude
on your own balcony? Not necessarily. In a condominium
development, a balcony is not considered private
property but common property assigned to your exclusive
use - but a common area nonetheless. Covenants, codes
and restrictions (CC&Rs) usually spell out what
activities can and cannot be conducted on common
property. Some associations prevent people from
barbecuing on their balconies or hanging large plants
from the railings. However, the larger issue of
regulating personal conduct is not so clear-cut. It
literally depends on what side of the fence you're on.
If the sunbather can be seen from a public vantage point
-- not by someone who must climb a tree or peer through
binoculars -- then the rule probably would be considered
reasonable, say legal experts. Incidentally, there are
places where nudity is tolerated but again, only out of
public view.
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Can condos ban smoking?
ANSWER: A homeowners association's board
of directors can restrict smoking if it applies to
indoor common spaces such as hallways or recreation
rooms. Outdoor spaces are a different story, say legal
experts. Any restriction would probably hinge on local
laws (i.e. if a city banned smoking outdoors, a
homeowners association probably could restrict smoking
in its outdoor spaces). Typical covenants, codes and
restrictions (CC&Rs), which govern condo associations,
give the board authority to make and enforce reasonable
rules for the use of common property.
But that would not apply to interior spaces owned by
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) 227-0852; dre.ca.gov.
Various Internet sites specializing in common-interest
developments, such as those operated by the Community
Associations Institute and CIDNetworks.
Do condos have to be made accessible to the
disabled?
ANSWER:
The 1990 Americans with Disabilities Act does not
require strictly residential apartments and
single-family homes to be made accessible. But all new
construction of public accommodations or commercial
projects (such as a government building or a shopping
mall) must be accessible. New multi-family construction
also falls into this category. In all states, the
Federal Fair Housing Act provides protection against
discrimination for people with physical or mental
disabilities. Discrimination includes the refusal to
make reasonable modifications to buildings that aren't
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 (916) 227-0551.
California residents can dial toll free (800) 884-1684.
dfeh.ca.gov
How do I figure out the homeowners association?
ANSWER: Learn everything you can about
the homeowners association before you buy into a
development governed by one. The association's
financial, political and legal conditions are very
important to your investment and quality of life. When
run properly, homeowners associations maintain the
common grounds and keep civility in the complex. If you
follow the rules, the association should not intrude on
your privacy or cost you too much in association dues.
Poorly managed associations can drag down property
values and make living there difficult for residents.
Start by studying the associations covenants, codes and
restrictions, or CC&Rs, and find out if you can live by
them. For example, if the rules prohibit loud music
after a certain hour and you like to play your CDs late
at night, this may not be the place for you. Don't move
in thinking you can get away with violating the rules or
change them later because you may find yourself in
turmoil with determined neighbors firmly in control of
the association board.
Find out all you can about the association's finances.
Beyond reviewing the budget, talk to the association
treasurer and find out if dues are expected to increase
and if any special assessments are planned. Ask if
special inspections have revealed problems with roofs or
plumbing that may cause a dues hike or special
assessment later on. Call and meet with the association
president. If you are the type of person who despises
intrusions into your private life and the president
seems more interested in gossip about the residents than
maintaining the property, this may not be the right
condo complex for you. Speak with residents to get their
views on the association's finances, its property
manager, how it operates and any politics. Associations
are volunteer organizations with elected boards, like a
mini-government, so politics can enter the picture and
spoil a good thing. Lastly, take some time to understand
how homeowners associations are organized and how they
conduct business. Like all real estate investments, the
more you know the better off you are.
How do you choose between condos and
single-family homes?
ANSWER: Using appreciation as a measure,
condominiums in some areas have been as profitable an
investment as single-family homes in the past five
years. And in some markets, condos appreciated even
more, according to some experts. While single-family
homes have been the preferred investment by home buyers,
changing demographics are helping make condos more
popular, especially among single home buyers, empty
nesters and first-time buyers in high-priced markets.
Also, the condominium community has worked hard in the
last few years to overcome image problems brought on by
homeowners association and developer disputes as well as
all too frequent construction-defect litigation.
Where do I get information on condo association
laws?
ANSWER: Resources: "The Condominium
Bluebook" by Branden E. Bickel, B& Piedmont Press; 2000.
Order online. Community Associations Institute,
Alexandria, VA; (703) 548-8600; caionline.org.
Where do I get information on condos?
ANSWER: The major interest group for
condominium projects and other so-called common-intereset
developments is the nonprofit Community Associations
Institute, 225 Reinekers Lane, Suite 360, Alexandria, VA
22314; (703) 548-8600; caionline.org.
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