Condominium Contract Terms Can Confuse First-Time Buyers
Condominium contract terms can confuse first-time buyers
Though condominiums have been in the housing scene and growing in popularity for nearly three decades, many prospective home buyers are still unfamiliar with some of the terms used in connection with purchasing them.
"It's understandable that first-time shoppers would be puzzled when they run across these terms, but the surprising fact is that so do many empty-nester buyers, who have re-entered the housing marketplace for the first time in many years to look for the maintenance-free convenience of condominium living," said Jim Straus, sales manager at Valley Lo Towers Condominiums, 118 luxury mid-rise condominium residences in north suburban Glenview.
The condominiums range in size from one to three bedrooms, with 1,096 to 1,704 square feet. The two-bedroom plan is priced from $189,900, and at present, less than five remain available for purchase (prices and availability subject to change without notice). A few one-bedroom condominiums also remain, priced from $149,900; all three-bedroom plans are sold out.
"Perhaps the biggest misconception is in the term 'condominium' itself - a mistake shared by home buyers as well as the general population," Straus said. The fact is, a person cannot "live in a condo" any more than they can live in a driver's license, he noted. A condominium is not a building, or even an apartment; it is a form of ownership.
Straus pointed out that "any kind of property can be a condominium, including a high-rise, low-rise or mid-rise apartment structure; town house or rowhouse, single-family home; even an office." What makes it a condominium is the joint ownership of the common elements, such as hallways, elevators, and the land surrounding the building.
The word "condominium" comes from Latin: "con" means "with" or "together"; "dominium" means "ownership of property" (also the root for "domain" and "dominion"). Thus, a condominium is a legal entity in which people own their own units exclusively, but own and share jointly with others the building's common areas.
Straus offers other definitions that may make the language of condominiums easier to understand:
Assessment. A monthly amount pro-rated and charged to each unit owner for the operation, maintenance and management of the condominium property - janitorial, security services, lawn care, snow and trash removal, for example. Special assessments for large improvements or emergencies may also be levied.
Association, or Owners' Association. In legal terms, the group consisting of all of the owners of a condominium development. The association is responsible for the upkeep of common areas and elements, drawing on monthly assessments from the owners to pay for operating costs.
Board of Directors. This group may also be called the board of managers or board of trustees. It is the governing body of the condominium association, elected by the unit owners. The directors have the power to manage and regulate the common property and to enforce restrictions.
By-Laws. These are laws of an association that govern its internal affairs and deal with routine and administrative matters. The association by-laws set the rules for how the building's "government" will be run, covering such things as defining duties and setting the order of business at meetings. They also give the board the power to establish an operating budget and hire professional management. By-laws should also be amendable by the owners. …