Condo Buying Checklist

by Billie Nordmeyer

Condominiums sometimes appeal to homebuyers due to a property's location, its relatively affordable price and the need for only minimal upkeep. However, condo-living is not for everyone. You will save money and frustration if you take the time to review some facts regarding a particular condominium before you submit an offer.


As a condo-unit owner, you'll have exclusive ownership rights to your unit. However, you'll share the condo's common areas with other co-owners. A Master Deed and Declaration of Condominium Property is the legal document that specifies each unit's percentage of property ownership. Review the master deed to determine your future ownership percentage, which will determine your obligations – fees and assessments -- and rights, such as your voting percentage at condo association meetings.


Carefully review the by-laws, which outline your rights as a condominium owner. One standard by-law protects the condominium corporation from expenses that arise due to changes made by an owner to his unit. For example, some changes to a unit's exterior must be reversed due to the change's negative effect on the condominium's appearance and, therefore, the value of the unit.


All condo rules must comply with national, state and local restrictions. However, the condominium homeowners’ board develops the condo's rules, which are property-specific. Therefore, carefully review these rules that pertain to pet ownership, parking, separate storage areas, noise levels, unit occupancy and the use of common areas such as a gym or clubhouse.


Meet with the property manager and the owners association's board of directors, which consists of condo owners elected by other owners to oversee the property's management and create policies. Confirm that the property's insurance policy, which protects the common areas of the property, provides adequate insurance based on the location. The insurance should protect against all hazards to which the condominium is exposed for either the insurable value or replacement cost of the common areas. For example, earthquake insurance is a must in California. Also, review three to four months of the board's meeting minutes to understand current owner issues including improvement projects, increases in dues and special assessments.

Unit Taxes and Expenses

Identify all costs of owning the condominium. These costs include annual property taxes, which local governments calculate using property valuation methods. Other costs include mortgage finance costs, real estate agent fees, home inspection fees and home warranty insurance.


The operating fund pays for the upkeep of the property’s common areas, property management fees and other salaries and expenses. The reserve fund pays for major repairs and replacement of common building systems. The condominium’s status certificate – including financial records – reflects the amount of operating and reserve funds available. Review the funds to make sure they're sufficient to pay for expenses and structural repairs recommended by a triennial engineering study that assesses the physical state of the property and documents probable maintenance costs for 10 to 20 years. A lack of funds indicates the condo might not be able to perform required maintenance and upkeep, which negatively affects property values and leads to special assessments to raise needed money.

Monthly Fees

It is the owners’ responsibility -- acting through the homeowners’ association -- to raise the monthly fees, if necessary, to ensure money is available to maintain the property. The homeowners’ association also approves special assessment fees, which compensate for shortfalls in the monthly fees. Review the fee schedule for increases, ask how the HOA levies the fees and what policy is in place to govern fee increases.

About the Author

Billie Nordmeyer works as a consultant advising small businesses and Fortune 500 companies on performance improvement initiatives, as well as SAP software selection and implementation. During her career, she has published business and technology-based articles and texts. Nordmeyer holds a Bachelor of Science in accounting, a Master of Arts in international management and a Master of Business Administration in finance.

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