Home Buying in Glenolden>Question Details

Iluvlansdowne, Home Buyer in Lansdowne, PA

How does Condo Association Fees work?

Asked by Iluvlansdowne, Lansdowne, PA Thu Sep 17, 2009

I am a first time buyer and am looking into getting a condo because I cant find a single home or townhome within my price range. The question I have with Condos are there is an association Fee that you have to pay. Do you continue to pay that fee after your mortgage is payed off? How does that work? Thank you for your help.

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BEST ANSWER
I am not from Pennsylvania. These are general comments regarding Condominium Associations, for you and other Trulians reading your Thread.

* * * See a Real Estate Attorney in your locale for Legal Advice * * *

1. BEFORE you sign anything, see a Real Estate Attorney for Legal Advice.
Have the Attorney review the Condo Documents, By-Laws, Rules, Regulations, Current Financial Status and Financial Records etc. of the Condominium Association with you.

2. As stated before, read what you are allowed or are not allowed to do, what you can or cannot do, what you must or must not do. Again, have a Lawyer walk through the Documents with you.

3. How easy is it to CHANGE the Condominium Documents?
How easy is it for them raise the Fees?
How easy is it for the Condo Association to charge you a Capital Assessment that may cost you thousands of dollars?

4. What percentage of owners are Renters?
For that matter, are you ALLOWED to rent your Condo?

5. WHO is in Control?
That is, who comprises the Board of Directors or other Ruling Governing Body that has Legal Authority over the Condominium Association?
Is it a Builder-Developer, is it a small group of "Control Freaks", or is it a fair representation of the Member Owners?
Example of "Control" - . Every year, some Condo Associations mail out PROXY VOTE FORMS. These forms give the Current Directors the right to cast a vote for whoever signed the Proxy (this applies in most States, I do not know about Pennsylvania, ask your Attorney). Many Boards of Directors can keep themselves in power indefinitely through the use of Proxy Voting (and other mechanisms). If you have "Bad Directors" in Power, they may stay on for years, even decades.

6. Remember that in a Condominium Association, you are forfeiting many of "The Rights of Real Estate". As stated below, you only own "Paint -In", or as some refer to it, you own"Air Space".

7. What about Insurance, both Hazard and Liability?

8. What are the odds of Resale if you decide to move?

9. Have you talked to a Lender about getting a Loan for a Condo (unless you are paying cash)? Condo Financing right now is a challenge - large down payment, stiff requirements, etc.

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Best wishes from "Condominium Hell" aka Florida,
Fred Griffin
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1 vote Thank Flag Link Thu Sep 17, 2009
Hello Iluvlansdowne and thanks for your post.

Condominium assessments or association dues are billed to you separately from your monthly mortgage payment. The purpose of the assessment is to provide funds to pay for services such as utilities (lighting to the common area, water to the landscaping or units, if water is common), maintenance of the common area facilities and funds to be set aside for the eventual repair and replacement of the building components.

A condominium is different than a planned development because you, as the homeowner, do not typically own the building--just the air space bounded by the perimeter walls of the unit. This is often called a "paint-in" unit, meaning that you own all of the spaces from the painted surfaces of the wall into the home. The building and structure, however, is owned by all of the members of the homeowners association in common. This is why homeowners association fees in condominium complexes tend to be higher than in planned developments where the owner must pay for and maintain the building, rather than the homeowners association.

Regarding your other questions, yes, you will continue to pay an assessment for as long as you own the condominium. Since the assessment is not in any way tied to the mortgage, even if the loan is paid off, the assessments will continue to be assessed and must be paid monthly.

Finally, as Terrence noted below, one of the most important issues to consider is whether or not you can live within the community where you choose to purchase a home. Some homeowners associations have extremely restrictive rules and procedures while others may be provide owners with more latitude in their daily operations. To learn more about any homeowners association, read the rules of the Association and their Covenants Conditions and Restrictions (CC&Rs) before buying. While it is also good to look at the Articles of Incorporation (showing that the association has been incorporated) and the Bylaws (the rules showing how the Board of Directors will operate), the Association's rules and the CC&Rs often contain the information of greatest interest to new buyers.

Good luck!

Sincerely,
Grace Morioka, SRES, e-Pro, CID Expert/Consultant
Area Pro Realty People's Choice
San Jose, CA
Co-Host - "Naked Real Estate" on http://www.blogtalkradio.com
2 votes Thank Flag Link Thu Sep 17, 2009
Condo association fees are totally separate from your mortgage payments. Depending on where you are looking, condo fees range from nothing (in which case you get nothing in services) to several hundred dollars. Fess could cover anything from lawn maintenance, snow removal, trash removal, use of community pool, etc. You need to check out each development which you are interested in.

One more thing you need to look at is the rules or bylaws of the association. This will tell you what you can or can not have on your home or vehicle. How many pets you are allowed to have, if applicable, etc.

Hope that helps,

Terrence Charest, e-Pro
1 vote Thank Flag Link Thu Sep 17, 2009
Hi,
I would like to thank you both for your answers. I checked out two condos. One actually had higher Association fees, which was surprising because it was not well kept. The other condo is actually alot more immaculate and the Association Fee is lower. I have asked my realtor for more information about it. I will also look into the Rules of the Association as was suggested here. Thanks again for your help.
0 votes Thank Flag Link Thu Sep 17, 2009
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