I am buying a foreclosed condo in a three unit bldng. Trouble is all units are vacantnow due to foreclosurs.

Asked by Judithhyde, Boston, MA Tue Mar 24, 2009

I need to insure my unit and need to find out who insures the common area. any answers

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Matt Heisler, Agent, Westborough, MA
Tue Mar 24, 2009

If the condos were completed, it is likely that the condo docs, and the association information, is available at the registry (and may be available on-line). But in most small associations, the association is the owners. The main concern here is who is paying the fees, and how many fees will be necessary in the future. With new owners en route, and no idea where the budget is (in fact, the budget may be zero), it could be possible that the capital reserve fund for these units is empty. This would be bad, especially if there are looming expenses. I would suggest getting some experienced help here, or you could get whacked with an assessment of considerable size. Foreclosures come with a lot of risk, and there is definitely risk in this situation. Furthermore, be forewarned that you may not be able to get a mortgage if the other units are bank owned, so check with your underwriter pronto!
Web Reference:  http://14wolfpen.info
1 vote
Brian Gokey, Agent, Dorchester, MA
Thu Jun 4, 2009
There is a very good chance if all units are foreclosed that there is no insurance in place. Have your attorney review the condo docs and find out what you (alone) would need to do to be a trustee of the association. Probably you just need to call a meeting and vote yourself in.
Also, you may have to front the money (lent to the association) for insurance and pay all the common expenses yourself. You should be able to get paid back when the other units are sold. Keep careful records and establish a budget which saves enough money to purchase insurance when it renews, plus water bills, common electric, landscaping, snow shoveling etc... The banks who own the foreclosed units are 100% responsible for reasonable condo fees.
0 votes
Deb McCourt, Agent, Ashburnham, MA
Tue Apr 21, 2009
Hey Judith, heed Matt's warning ! Are you working with a buyer's agent on this? You may well be looking at some major issues here. You may also be nominating yourself to be the association for the time being. A master policy may be your responsibility. Finding a company to write a policy on an unoccupied building may be a real job in itself and you will be responsible to pay for the full year premium up front prior to closing and in addition to a policy for your own unit. (personal belongings).
The common areas do come under the master policy.
In addition to giving you a major headache, did we all manage to answer your questions?

0 votes
Monroe Heyman, , Jamaica Plain, MA
Tue Mar 24, 2009
Hi Judith,
So like you need a good buyer broker to guide you through the process. There probably is no condo assoication nor insurance on this building.
Monroe Heyman
Web Reference:  http://www.MonroeHeyman.com
0 votes
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