Checklist for Condominium Listings
Checklist Before Listing a Condominium
Our friends at Guarantee Mortgage put this nice list together of issues that need to be resolved before putting a condominium on the market. I’ve seen many of these things send a deal into a tail spin, it’s better to deal with them early on.
- Make sure the CC&R’s include an arbitration clause.
- Make sure less than 15% of the units in the HOA are delinquent on HOA dues.
- Make sure the HOA has decent reserves. 10% of the annual revenue is a good rule of thumb.
- Make sure there is no litigation in the property.
- Make sure the majority of units in the HOA (51%) are owner occupied or 2nd homes.
- If the square footage is less than 500 square feet in the unit make sure there are similar comparable properties that have recently sold.
- Make sure the one entity does not own more than 10% of the units in the HOA.
- If less than 10 units in the HOA make sure each owner only owns one unit.
- Make sure the master condo insurance is not pooled insurance meaning there are several HOA’s under one umbrella.
- Make sure the commercial square footage mix of the HOA doesn’t exceed 20%.
- Make sure there are no special assessments. For instance, to pay for the new roof the building needs but the HOA doesn’t have enough money to pay for.
- Make sure there are no deed restrictions as there are for many live/work lofts, senior and disabled living communities.
