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Top 5 Questions To Ask When Buying a Condominium

May 29, 2012 by Lucas Lechuga


Buying a condominium is quite different than buying a house.  A different process is involved so make sure that you ask the right questions to avoid unexpected issues or expenses after closing.  Below you will find what I feel are the top five questions to ask when buying a condominium.

1.  Does the condominium development have any current or planned special assessments?

A special assessment is a one-time charge levied by the condominium association upon unit owners to pay for unanticipated expenses such as a major replacement, repair or improvement.  Special assessments are rare in newer buildings but typical in buildings that are 15 years old or older where a roof might need to be replaced, a pool might need to be resurfaced, a lobby completely redesigned, etc.   Although sellers are obligated to disclose any special assessments to buyers when entering into a contract, I recommend speaking with the property manager prior to making an offer so that you can take the information into account when coming up with a price to offer.  A special assessment is not a deal killer but I would have the seller pay for all, or at least the vast majority of the special assessment, at closing.  When shopping for a condo in a building that is 10 years old or older, I would also find out from the property manager if the association has a reserve account.  A reserve account, which acts as a savings account, holds funds set aside by the condominium association to pay for major replacements, repairs or improvements on the building.  Reserves funds are intended to prevent or offset the need for special assessments.  For those looking to buy a condo in a much older building, keep in mind that all condominium buildings in Miami-Dade County must be inspected and recertified every 40 years.  This will almost certainly result in a special assessment of some sort being levied if the condominium association has not kept on top of its repairs over the years.

2.  How much are the condominium association fees?

Condominium association fees, also known as maintenance fees, are used to pay to operate and manage the building.  Expenses that are often covered by these fees include: the cost to insure the exterior of the building, pay staff salaries, maintain and operate the amenities and pay not only the utilities which are needed to operate the building but also any utilities that are provided to individual units such as water, sewer and trash removal.  A portion of the condominium association fee may also be set aside to fund a reserve account.  Condominium association fees are normally paid on a monthly basis but I have seen cases where the condo association elects to have its members pay them on a quarterly basis instead.  In Miami, the fee charged to each unit owner is determined by calculating the proportional amount of the budgetary expenses attributed to each unit based upon square footage .  I have heard of buildings in other cities base the ownership percentage on other standards such as view or floor location of the unit but I have not come across any condominium buildings in Miami which use anything other than square footage as their basis.  The condominium association fees can change from time to time so I would check with the property manager to ensure that the figure you see in the MLS is up-to-date.  I would also find out if there are any plans to increase or decrease these fees anytime soon.

3.  Should I have an inspection done on the condominium?

9 out of 10 times a condominium inspection will not reveal any major concerns.  Nevertheless, I typically recommend that a buyer have an inspection done anyway.  The cost of a property inspection is very small in the grand scheme of things.  It is better to be safe than sorry.  You will want to ensure that the air conditioning unit and appliances are operating properly.  Keep in mind that a standard inspection does not include an inspection for mold.  I recommend making a visual inspection of the ceilings and air conditioning closet for water stains.  A water stain does not necessarily mean that mold is present but I would recommend that the buyer have a mold inspection done if that is the case.  It will cost extra but it could potentially save you thousands of dollars and a ton of headaches.

4.  Will I be able to obtain financing to purchase a condominium?

If you are looking to obtain financing to purchase a condo then this should be the first question you ask.  Aside from your creditworthiness as a buyer, the answer will depend on the building in which you seek to purchase a condo.  The development will need to meet certain guidelines in order to be considered Fannie Mae approved which would then make the building eligible for conventional financing.  Although we do work with banks that will finance a condo that is not eligible for conventional financing, the interest rate will normally be slightly higher than that of a conventional loan.  In either scenario, a bank will typically require at least a minimum 20 percent down payment.

5.  Does the condominium association have any restrictions?

The condominium association can, and often does, implement restrictions on owners.  The two most common are lease and pet restrictions.  A condominium association will typically limit the number of times per year that an owner is able to lease their unit.  The association will normally also set a minimum duration for each lease.  Such policies prevent the elevators from constantly being congested with people moving in and out of the building.  Investors, on the other hand, generally welcome less restrictive rental policies in order to maximize their potential revenue.  Most condo associations in Miami establish a minimum rental period of 3 or 6 months.

Another major restriction that a condominium association can impose is one on pet owners.  The majority of new condo developments have very lax pet policies at the outset.  However, once the building is handed over the to the condo association more stringent policies are typically put into place.  It is common at this stage for the condo board to vote to allow owners to have pets but not renters.  Although debatable, the rationale behind this is that owners are more respectful of the property than renters.  Investors, however, should keep in mind that rental candidates will be limited if such policies are implemented in a building where they own a condo.  You would be surprised by how many people own a pet these days.  The condominium association can also restrict the items kept on your balcony, the type of vehicle(s) you can park in the garage, the days of the week and hours for which you can move in and out of the building, the hours you can access the amenities and so on.

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6 Comments on "Top 5 Questions To Ask When Buying a Condominium"

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Tim T

Been hearing great things about sales activity for single family homes, I was wondering how quickly the pace is improving for the condo market in Miami?

Jane Peters

This is totally applicable to purchasing a condo in our area also. You really need to do your homework, especially with the rules and regulations to ensure that there are no surprises. This is an excellent overview, Lucas.

Rosie Hernandez

These are all great questions. Part of knowing about any restrictions is knowing that if purchasing as an investor, is renting allowed. Sometimes an association will not allow renting of the unit until after having owned for a year. Rosie Hernandez, Gold Rose Realty

Frank Delaware

A friend of mine was thinking about buying a condo, and I was curious about how you would do it correctly. It’s interesting that you say to make sure that you get the building inspected before buying. It would be nice to make sure that nothing is wrong with anything.


Thanks for the great tips for buying a condo. I like how you said that having an inspection is a good idea, even if nothing major is found. To me, it’s better safe than sorry, even if the inspection may cost you a little extra.


Thanks for the advice on buying a condo. My wife and I both think buying one is the best option for us right now, so that’s what we’re looking into. I didn’t realize that the association fees could be so different, so we’ll definitely keep our eyes on that.

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