Condo buyers see benefits, face issues

MIAMI -- Oct. 14, 2003 -- Buyers of condominium properties enjoy many of the same benefits as single-family homebuyers and then some. But there are a few issues that buyers should know of before they make a decision.

Condo buyers enjoy the same mortgage-related tax breaks as single-family buyers. Moreover, they have lower maintenance requirements; may benefit from better security; and can enter the homeownership market at a more affordable price.

At the same time, however, condo buyers give up the right to make their own decisions about their property and instead must bow to the rules and regulations carved out by the condominium association. These bylaws govern everything from pets to subletting to permissible holiday decorations and activities allowed in common areas.

Therefore, in addition to checking to make sure that a condo community is well managed -- as illustrated by clean common areas, adequate parking, neat garbage facilities, and buildings in good physical condition, among other indicators -- prospective buyers also must look into the bylaws. It also is wise to ask about any recent special assessments for repairs or upgrades, as too many of these extra charges for major work may point to financial mismanagement by the condo association.

While researching each community that draws their interest, house-hunters additionally should make sure that no more than a third of the units are rentals, or risk difficulty in lining up financing; and beware of maintenance fees that are ultra-low, since this likely means that the association is setting aside reserves only for routine expenses but not for emergencies and major repairs, which will then likely result in a special assessment at the homeowners' expense.

For a first-hand perspective on the community, condo shoppers should talk to existing residents and get their views on the competency of the condo association and opinions on the day-to-day management of the complex.

Source: Miami Herald (10/12/03); Seemuth, Mike

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