Condominium Buying Tips
A condominium is an apartment house, or a unit in an apartment house, in which the various units are individually owned. Each owner receives a recordable deed for their unit, enabling them to mortgage and sell it independently of the owners of others. The word comes from the two Latin words: con, meaning together; and dominium, meaning property. Hence, in a condominium, there is always property owned in common with others, as well as the individual units, which are owned outright.
A townhouse is a house having walls in common with neighbors, whereby the owner has title to their individual unit and a deed for same. There may or may not be shared property held in common with others. Townhouses and condominiums make it possible to provide more living space on less land. Thus, as land prices rise and population increases, condominiums and townhouses become more and more popular. The property owned or shared with others may include the lobby, halls, elevators, recreation areas (both inside and out), lawns, grounds, basement and garage.
When you buy a condominium unit, you take title to your unit and have all the privileges and burdens of ownership, including the payment of taxes. You will also be required to pay a monthly fee representing your proportionate share of the cost of servicing, maintaining and repairing those areas you share in common with others.
Buying a condominium should be a well-considered decision based upon an understanding of the social, financial and legal aspect of the purchase. Just as in the purchase of any residence, you should consider carefully whether or not you really want to buy the property and that it is right for you and your family for an extended period. Remember, in a condominium, you will be closer to your neighbors and, in fact, sharing property with them.
In buying a condominium, you will want to review the various documents relating to the common ownership of shared property, such as: the declaration, bylaws, operating budget, management agreement and regulatory agreement. Determine if there are restrictions on your right to sell, such as offering it first to the condominium association before putting it on the market.
Financial considerations are particularly important. In addition to the usual payments on your mortgage and taxes, you will have to pay the pro-rata charges for the property held in common with others, which will, no doubt, rise over the years.
You will also incur closing costs when you purchase your condominium or townhouse, which are much the same as usual closing costs.