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Damien Samuel, Real Estate Pro in 60640

New Construction Condo Association...

Asked by Damien Samuel, 60640 Mon Apr 7, 2008

How does this work? If we are the first unit to close in a 6 unit building, what say do we have? Has the developer already drafted the documents?

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Thomas your answer is very thorough! The only other caveat I could add, make sure your developer has a plan as to how the assessments are going to be paid, to whom and who will hold the funds. Typically when a unit is closed in new construction or in a new conversion, you as the owner are required to put up 2 months to establish a reserve base. All of the other closed units will do the same so when the conversion is passed from the developer to the unit owners, you will have a base fund. In the mean time, the developer is responsible for maintaining the association and making sure payments are made and maintenance issues are handled. Hope that helps.
0 votes Thank Flag Link Tue Aug 6, 2013
What is the formula for setting the amount of money for a reserve for a new condo assn.?
0 votes Thank Flag Link Mon Aug 5, 2013
Hi Daniel - congratulations on your home purchase! In regards to forming a condo association, the developer legally maintains control of the management and association until 67% of the units have been sold/closed. In many cases, developers do not turn over the management responsibilities until units sales reach 75%. Because you are the first of 6, there will need to be at least 4 units sold before you can take over management responsibility. At that time, you may choose to be self-managed or hire a firm that can professional care for the collection of assessments, arrange for the care and maintenance etc.

In terms of documentation, by law the developer must have recorded the condo declarations and documents prior to the sale of the very first unit. The declaration declares what are common elements of the condominium, percentage of ownership rights in the common elements, what is covered in your monthly assessment, what your common insurance covers in the event of a claim etc etc In addition, there are rules and regulations that you must abide by will residing in the unit. You should have received a copy of the declaration and bylaws prior to closing on your unit.

Currently, if issues arise you need to address them directly to the developer or the management firm that may be responsible for the management of the association while the developer is in control. In Illinois, by way of a 22.1 disclosure, associations are responsible for disclosing financial information, provide full disclosure of pending litigation against the association, provide and manage a budget as well as document and distribute meeting minutes from association meetings ideally held at least quarterly, if not monthly.

I hope that helps shed some light on the situation. Best of luck!
Web Reference: http://www.thomasjhall.com
0 votes Thank Flag Link Mon Apr 7, 2008
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