How to vet your condo board (This content is subject to copyright.)
If you’re buying a condo, co-op, or a house in a homeowners association ( HOA), then you probably have to submit to an interview by the board of directors before the deal is done. And certainly, it can seem very intimidating to sit there and be controlled by the “in” crowd in a community you hope desperately to join in. You wonder: Will they of you? Do you have what it takes to fit in?
Yes, friends, you are back in high school again.
But here is an idea: You can ease up on the teeth gnashing already. The truth is that they should be a bit nervous about meeting you, too. Sure, they may be peppering you with questions about your finances and evaluate how well you get along with your new neighbors. But these boards have their own financial situation, their weaknesses, and their personality quirks — that all could have a big impact on what life will be like.
So just be that they are being monitored, you need fat and you need to do it before you decide to buy and move. Here are some questions to ask them to help you suss out if they run a tight ship or a total mess, so you can weigh the pros and cons of becoming a member of their club.
“What are the rules regarding pets/home improvements, etc.?’
Apartments, co-ops, and HOAs are more or less closed communities, where the members must adhere to a set of rules-also known as the Declaration of Covenants, Conditions and Restrictions, or CC&Rs. House-sellers will provide you with these CC&Rs during your review process, and it is important to read about this scheme, and ask questions about everything that concerns you if you meet with the board of directors in person.
“The quality of life questions, which are often overlooked during meetings with a board of directors,” says Kathy Murray, senior vice president at Douglas Elliman real estate in New York City. There are no problems too small or stupid when it comes to something that is important to you. Love tinkering with your old Cadillac? Better to find out if your HOA you can do in your driveway. Interested in having roommates or subletting your place with the use of services such as Airbnb to the opportunity, to make extra money? Better make sure that’s allowed, or else you could get in serious trouble. Love the painting of your house wild colors? The council may need to the thumbs up for you to buy the supplies.
If you are not certain CC&Rs, don’t just assume, you can just ignore once you’re part of the community. This can lead to fines (which you also want to ask about), or even for you evicted from your home. The good news? If certain laws are really just not gel with you, you may cancel your contract. As long as it is during your review period, you can usually withdraw your offer, keep your deposit, and move, just a little bit worse for wear.
It is so worth it to be 100% sure that you have to play the game by their rules.
“How many times have the monthly costs changed?’
Parking garages, roof gardens, neighborhood clubhouses, and common swimming pool-nice amenities. But they should also be paid, in a part of you, in the form of monthly dues. So before you buy something, you want to know not only what those maintenance costs are, but the question of how often these costs have changed in the past 5 or 10 years. Also ask whether an assessment has been made (these are temporary hikes to cover unforeseen expenditure) and how big the reserve fund is in place (which acts as a buffer against sudden fee hikes).
“Some new construction communities are under-capitalized at the beginning, so 10 to 15 years later, when some of the common property begins must be replaced, homeowners are surprised by the fee increase suddenly or special assessments shall be levied,” says Christopher K. Bourland, a real estate appraiser and a lawyer for the Mid-Atlantic Valuation Group, Inc., as a member of the board of a condo association in Pennsylvania.
“What is a meeting?’
The question of whether the residents regularly attend the open meeting of the council sessions, and if so, what these meetings are actually like. In a perfect world, would you sit in yourself.
“Are people who are arguing in the board of directors, or the development of recommendations? Residents are suggestions welcome, or does the board react defensively?” says Dottie Schindlinger, governance technology specialist at BoardEffect.You can also do a search for local news articles about the building or the neighborhood-in particular for those where a member of the board of directors is cited. Is this someone you want making decisions for you?
“How long do board members typically serve?”
Members of the board are usually chosen by others in the community and serve for a year. But if these people usually flee the board as soon as (or before!) their time is, it is a good bet that it is a toxic environment. On the other hand, if a board of directors has the same members for years, it can be a sign of stagnation. The reason for this? “There is no clear path for new voices and new leadership to flourish,” Schindlinger explained.
What do you hope to see: “A balance between veteran board members and new people, a clear path to become a member of the board of directors, and the evidence that the board of directors is to maintain, and it works according to its own statute,” Schindlinger comments. You know the expression “Power corrupts”? that can happen in the plates, too, so unless you’re planning to organise a coup, you better make sure they’re serving their community.