Publications
What Are You Buying Into?
Published December 4, 2004 as
Buyers should check association rules
People are buying condominiums and townhomes in record numbers. High-rises, mid-rises, low-rises, townhomes, new construction, re-habs,…you name it. Whether it is their primary residence, second home or an investment, most buyers are uninformed as to what is required of them in their new investment.
Before buying a home in an association, a buyer should make an inquiry about not only what is allowed and what is not, but also specific questions about their own lifestyle. At some point in time, most associations will have a confrontation with an owner over enforcement of policy where the owner’s response is, “I didn’t know.” Frequently, an individual challenging an association’s policies would not have bought a dwelling in that community had they known that these restrictions even existed. Some people blame their lawyer, the realtor, the seller...the bottom line is, ask the right questions or accept responsibility for the mistake you made.
These are just a few of the most common situations where a simple question could have alleviated a lot of grief and unnecessary expense.
When buying a new home . . .
1. Does the community have an association? Multi-family buildings and townhomes are obvious, although it is worthwhile knowing whether or not it is a condominium of a co-op. These distinctions will cause a problem when determining whether the owner or the association is responsible for certain types of maintenance. The bigger problem, however, is the owner of a single-family home who claims he did not know he lived in an association.
The hue and cry does not arise when he gets a dues statement, but when an uninformed owner finds out after he has made an exterior modification to the home, such as a deck or a fence, without getting approval. I cannot count the number of inquiries I have received over the years from owners being challenged by their association for putting in this or that without permission. There is no defense. Many owners do not even bother applying for a building permit, but when they do they learn that there is often a conflict between restrictions in a set of covenants and building permit requirements for a municipality. Typically, an owner will go to the city, obtain a building permit and then find out in the course of construction that the amenity in question is prohibited by a declaration that he did not know existed.
Had the purchaser asked the question of his attorney or the Realtor, it may have even impacted his decision whether to purchase. Once he owns the house, the new association member must either comply or is best served by selling the house and getting out.
2. Will I be able to put up a fence? This is one of the biggest causes of litigation between an association and an owner. Some associations prohibit fences or severely restrict size, style or location. Sometimes townhome communities which are condominiums allow their owners to install their own fences. If an owner or prospective purchaser has any plans to put up a fence to enclose a pool, secure pets or children, or maintain privacy, there should be a clear understanding regarding what the association requires before construction commences.
3. Can I keep a pet? Most associations that restrict pets have amended their declarations and recorded the amendments. Some associations amend their rules to limit pets. Whether or not these policies are recorded, they will not show up on a title report. The buyer must contact the association and find out exactly what is permitted. By looking at a declaration, it may not be sufficient in and of itself, since the issue may be addressed in the rules. By asking a simple question or even getting a written disclosure, an owner will be protected from making the mistake of buying a condominium and then being forced to get rid of Fido.
4. Can I rent out my unit? Most associations are fearful or even hostile about renters. Many associations have amended their declarations to prohibit leasing. Just as in the case of pets, these amendments are not disclosed in the title report.
Before a purchaser buys a unit for investment, he must make sure it is permitted. Likewise, an owner must also inquire before moving out and entering into a lease agreement. However, in the case of fences, pets, tenants, etc., one must always keep in mind that an amendment to the declaration can be adopted at any time and change what had previously been permitted.
5. Can I put in a wood floor? This is a two-sided problem. First, for the owner who puts in a state of the art, sound-muffling hard surface who still violates a rule requiring carpeting and second, for the owner on a lower floor in an association which has no policy and is now downstairs of a recently installed hard-surface with no insulation.
The owner installing a hard surface may be compelled to remove it, or carpet over it, if the association has a valid policy in place. Unfortunately, if the association has no policy or even permits hard surfaces, the aggrieved downstairs neighbor would have to prove the noise level is unreasonable or should anticipate the possibility in advance and lobby the board of directors to adopt a policy either prohibiting hard surface flooring or establishing standards and specifications for sound-proofing.
6. Do I own my own parking space(s)? Some associations are set up with deeded parking, open parking, exclusive use, limited common elements and other types of formats.
It is the board of directors’ obligation to enforce parking policies but they must be legally enforceable. Just because an owner has been parking in the same space for 20 years does not mean the association, without advance notice, can declare it open on a first come, first served basis, even if it is a common element. Likewise, two owners may not be able to trade spots via handshake if the spaces are designated as units unless there are documents of conveyance.
What if the purchaser is disabled and requires a handicapped parking space where there is none? What “reasonable accommodation” must the association make to comply with state and federal laws? It is important to know whether rights can be modified, what the legal status of the space is and whether it is freely transferable. Many boards probably do not even know the answer to this question and it may require a review of the association’s legal documents.
This is why it is important to be a thoroughly informed buyer. One cannot make assumptions when buying a home governed by an association.
By being diligent, asking a few questions and having your attorney check out your concerns, you can avoid a future conflict with the association.
As you can see, all of the above are examples of “What you don’t know, can hurt you!”