So you’ve decided to buy a condominium in the Chicago area. Condos offer real advantages, especially security and maintenance. But you’ll want to ask the condominium board or association a few questions. If you’re on either side of a real estate transaction in the Chicago area, have an experienced Chicago real estate lawyer review all the pertinent documents and get the answers you need. Make sure you get satisfactory replies before you finalize any transaction.
1. What covenants, bylaws, and restrictions govern the property? Are any grandfather clauses operative? You may find, for example, that those who bought a property before a certain date can rent their units but buyers who bought later cannot. Obtain a copy of the bylaws and make sure you can live with them. Have a good Chicago real estate lawyer review all the property documents including the bylaws and the master deed.
2. What percentage of units is owner-occupied? Generally, the higher the percentage of owner-occupied units, the more saleable a unit is at resale time.
3. How much does the association keep in reserve? How is that money invested?
4. Do association assessments keep pace with inflation? Smarter condo boards raise assessments slightly each year to build reserves. To determine if an assessment is reasonable, compare the rate with others nearby.
5. What does the assessment cover – common area maintenance, recreational area maintenance, snow removal, trash collection? – and what doesn’t it cover?
6. Have special assessments recently been mandated? If so, for how much was each owner responsible? Repeated expensive assessments could be a sign of the building’s condition or the board’s fiscal policy.
7. How much turnover occurs?
8. Is there ongoing litigation? A lawsuit can quickly deplete reserves.
9. Ask residents how they feel. Determine the condition of the building. If the roof and windows need repair, that could be a sign of bigger troubles.
10. Are multiple associations involved with the property? Umbrella associations may require separate assessments. Make sure you know who’s involved and how any hierarchy is structured.
When you buy a condominium in the Chicago area, get satisfactory answers to these questions, and make certain that you have an experienced Chicago real estate lawyer working on your behalf. It’s the way to rest assured that the transaction is smooth, honest, and genuinely in your best interests.