3 questions you must ask before buying a co-op
about to sign on the dotted line for that condo or cooperative apartment. The
complex looks well maintained, and the monthly fees are in line with other places
you've checked. What could go wrong?
Experts recommend that you ask these three
important questions to the owner, manager or the board of directors, to make
sure there are no hidden problems:
1. Is there any pending litigation filed
against the co-op corporation or condo association?
"This is very important," says David St. John, an attorney whose firm
represents more than 600 condominium, cooperative, homeowner and other community
associations, "because once you are the owner, the outcome of a lost suit
could be passed along to you, the individual owner, in the form of a 'special
assessment' that there is no way around paying.
2. Are there any pending major engineering
projects yet to be completed that will require a future special assessment?
Check with some current owners about problems that will have to be dealt with
such as eroded concrete balconies, road repaving and sewer or electrical reworking.
"This is especially important in older units because any one of these could
result in an unexpected big bill for you after moving in, " St. John says.
3. Does the co-op or condominium have
adequate reserves for repair or replacement costs of a major project?
"Many of these boards of directors do not maintain reserves because
the unit owners that have a say in the operation just won't vote to increase
the maintenance fee to allow a reserve," explains St. John. "Be very
wary of buying into a no-reserve development."
-- Posted: July 1, 2003