Investing in Real Estate
Beach Real Estate · Condos
Caveat Emptor – “Let the Buyer Beware”
Homeowner Associations (HOA)
Condo owners are members of the Homeowner Association, and are subject to special assessments by the Board of Directors (BOD). HOA’s have significant legal authority when members break rules, or don’t pay their share of expenses – the BOD can issue fines, place a lien on the property, and even foreclose.
The Covenants, Conditions & Restrictions, and any rules implemented by the BOD, restrict the use of a condominium, e.g. decorating, rentals, pets, visitors, use of common areas, etc.
HOA members own an undivided share of the common property, and are responsible for a portion of the repair and maintenance expenses; inadequate maintenance of the roof, building-envelope, elevators, etc. can cost HOA members $1000’s.
Lawsuits involving the HOA, or the Board of Directors, can expose condo owners to significant financial liability. The HOA should have a Directors and Officers Liability Insurance Policy payable to the Association, as indemnification for losses resulting from negligence, fraud, or conflict of interest.
Poor planning by the BOD can result in HOA members funding the repair and/or replacement of the common property via “special assessments.” HOA’s should have a reserve fund to ensure the equitable allocation of expenses for the repair and replacement of the common elements.
A Home Inspection before buying a condo can save you money by identifying defects, while documenting the age and expected life-span of the major systems.
*The Seller or Agent should reimburse you at closing for the cost of the inspection.
Peace of Mind
A Home Warranty for the condo provides peace of mind, it just makes sense for everyone – no one knows when a component will fail.
*The Seller or Agent should cover the cost of the warranty.
Always work with someone that has experience with the various issues of owning resort property.
If you’re interested in beach property, or just have a real estate question, contact me anytime.
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