After what is often a long search, condominium buyers know that they’re getting their piece of The American Dream. What they should know – but often don’t – is that living in a condo can be very different from living in a single-family home. Ensuring buyers understand both the rules and the risks upfront is critical for a happy condo experience, Realtors say.
Agents should advise their clients to keep their eyes open long before they get to the offer stage, said attorney Richard Rosa, co-founder of Buyer’s Brokers Only.
“One thing I often see when I walk into in bigger complexes, either by the elevators, the mailboxes or other common areas, is a bulletin board,” Rosa said. “I tell them to check out what’s posted; you never know what you’ll learn. Maybe it says something about keeping your door locked because of recent burglaries or make sure you trash goes right in the dumpster because they’ve been having problems with rodents. You never know what you can find out.”
Review Docs Carefully
Even buyers with real estate or condo experience should review the documents with their attorney before buying, said Clive D. Martin, a litigator at Robinson + Cole and co-chair of the condominium law and practice section at the Real Estate Bar Association of Massachusetts (REBA).
“The advice to buyers’ attorneys is that buyers don’t want to pay you for your time to walk them through the condo documents, but I think they should,” Martin said. “It’s cheaper than litigation.”
Most newer condominiums have rules that restrict owners’ ability to rent their unit short-term, such as through a service like Air BnB. But if the regulations were drafted before that company became popular, they probably don’t.
“We’re seeing dreadful issues related to this now,” Martin said. “For full-scale protection against short-term rentals, you need to have tight language. You’re letting unknown people into the building. It’s a very unfair thing to do. It behooves boards to be thinking about this.”
Rosa said he advises his condo-buying clients to have their attorney review the condominium documents with them. And if it’s a new development and the documents haven’t been recorded yet, there may be changes that could be made that would benefit his buyer.
“Maybe they could get a more convenient parking spot or change some space that might be common to the exclusive use of their unit,” he said.
Other restrictions may apply and should be carefully considered, Rosa said.
For example, “there are condominium documents that don’t allow pets or limit their size,” he said. “I tell clients to think about whether or not they’re going to be ok with keeping to those limits. Also, are they ok with living in a building that maybe doesn’t limit the size of pets allowed?”
Tim Moriarty, founding member of Moriarty, Troyer & Malloy and REBA’s co-chair of residential conveyancing, said buyers should be instructed to ask the seller for records of the recent condo association meetings for anything that may be relevant to the unit.
“I would say always suggest to your buyer that they get as much information as possible from the seller,” Moriarty said. “Get the financials and any information about the condition of the property and get any info about pending assessment or litigation. It’s good practice.”
There are some ways for buyers to protect themselves, said John D. Kalish, a conveyancing attorney with Moriarty Troyer & Malloy in Braintree – and their agents should be aware of and willing to assist buyers with those aspects they can control.
“There are some universal protections, like a title search and an inspection,” Kalish said. “You should be concerned about maintenance and the interior of the unit as well as the envelope. To do the perfect analysis, you’d do want to do more of an engineering analysis but most buyers probably can’t afford to have a full-blown engineering analysis.”
Some Problems Can’t Be Anticipated
The seller has no obligation to disclose a known issue with the unit or the building to buyers, but if the seller’s agent knows about it, the agent is obliged to disclose significant issues.
“That includes any information that would reasonably impact a decision-maker in the transaction,” Moriarty said. “Good brokers tend to take a conservative approach on this. The seller has no duty to disclose anything unless they choose to, and then it has to be accurate.”
Then, of course, there are the many problems in condominium associations (as in life) that simply can’t be foreseen.
“There are title issues that could come up in an association that an experienced lawyer will not identify because a buyer client will not think it is financially feasible to pay a lawyer to research them,” Moriarty said. “What you balance is risk and reward. There’s always a risk. You try to pick out the things that are most likely to present a problem. You look at the master deed and the standard things.”
Martin – who lives in a condominium – said even if one buys into a building filled with like-minded neighbors, they’re all eventually going to sell their unit to someone and it might well be someone with a very different point of view. And luxurious living does not insulate against friction with one’s neighbors.
“Someone buying a unit downtown in an affluent community had better understand before they move in that many of the units will be owned by absentee foreign owners who are simply parking their money in safe real estate,” he said. “A lot of those units are empty or they put their friends or their kids in there and they run amok and now you’re living in Animal House. It definitely happens. How are those rules enforced? Very often they aren’t enforced very strictly.”
Condominiums as a concept are still fairly new; they have only been around for 50 or 60 years, and only becoming popular in the last three decades. As a result, there isn’t nearly as much case law on them as there is for single-family homes.
“Condominium living is an experiment,” Martin said. “There won’t be a time when condominiums have reached a level of maturity where we can sit back and feel like they will all run smoothly. There’s always going to be stress. I don’t know how it could be different. The shared ownership model invites conflict.”
