I recently had a buyer client ask me whether he really needed a pre-purchase inspection of his new Lincoln Park condo. He said…
“It’s a condo, what could possibly be wrong with the place?”
A lot, and yes, condo inspections are worth every penny. That said, an individual condo unit inspection alone is not sufficient. Most major issues will arise with the building limited-common and common systems such as windows, tuckpointing, roof, elevator, parking garage, deck, etc. So how do you uncover these issues?
In my post Trust, But Verify When Making a Condo Purchase I touched on this issue. To uncover issues with building common elements, a thorough review of meeting minutes and budget can yield a wealth of information.
So while the unit home inspection may reveal that a GFCI near the kitchen sink needs replacement, a review of the association meeting minutes may reveal that the building roof needs to be replaced.
Inspections are important but don’t miss the forest through the trees.
{ 4 comments… read them below or add one }
Every buyer should demand the disclosures mandated by section 22.1 of the Illinois Condominium Property Act. These disclosures are quite extensive.
As to the value of a home inspection – that depends to a great extent upon the home inspector. Too many of the inspectors recommended by Realtors have more loyalty to getting the deal done than to protecting the buyer.
For more info on the 22.1 Joe mentiones above … http://www.chitownliving.com/2007/11/15/condo-buyers-meet-your-friend-the-221-disclosure/
Not all issues with the building will be in the minutes. Condo buyers should probably always realize that there is a certain risk that they take on because their inspectors will not see all the building systems. Even many associations may not document all the issues as they should.
As president of an association myself, I would say that the important things to look for are the balance of the reserve account and whether there has been a capital needs study. Our property management firm also has a licensed inspector that comes to the property every month. If a condo association has such an inspection report, you might ask to see the most complete one.
Even so, meeting minutes and documentation won’t catch everything. The best defense against nasty special assessments is going to be a good capital reserve and/or a capital needs study.
Great points Jeff. I wish all condo buildings were as well run as yours appears to be.