Condominium associations mean that a unit in a condominium, or condo, functions quite differently from an apartment in a regular apartment building. A condo association, responsible for running a condominium, has a number of responsibilities to perform. If you want to buy a condo, you should be completely aware of these.
1. Every Owner is a Member
Every owner of individual condo units is a member of the condo association. The association is responsible for allocating and saving money, maintaining a reserve fund, repair and maintenance.
2. Rules and Regulations
All condominium associations have a set of rules and regulations in order to make the process of running the condominium more convenient and efficient. These rules cover every facet of living in the building. For example, pet policy, common area use, trash policies, repair responsibilities, guest parking etc. Every unit owner gets a copy of these rules when they purchase a unit in a condominium.
3. Board of Directors
Condo associations must have a president, secretary and treasurer in addition to other members of the board of directors. This group of people is annually elected by the owners of condo units in a building and is responsible for collecting fees and fines, organizing repairs and maintenance.
Condo reserves are maintained through an annual deposit by all unit owners. These funds are used in case of emergencies when a large amount is required for capital repairs or maintenance. Usually, when you buy a condo, the equivalent of two months fee is collected from you and submitted to the reserve fund. Reserve funds are an important and necessary part of managing a condo so there are no problems when there is an emergency requiring immediate repair.
5. Condominium Property Management
Large condominium projects usually hire property management companies to take over the management of many aspects. Professional management companies offer many services like financial management, repairs and maintenance and even the landscaping. For larger projects where the members of the condo association do not have enough time to look over everything, hiring a property management company is a good idea.
6. Special Assessments
Special assessments are a one-time fee charged from all unit owners for capital improvement or repair of the condominium building. Usually, a special assessment is required if the condo association decides that the reserve finds are inadequate for a certain repair or maintenance and they will need more funds. Before buying a condo, ask about any special assessments the condo has done in the past because this will give you a good idea about how well, or not, the condo is managed and help you make a more informed decision.