Wednesday, April 25, 2007

Buying a Condo? Read the Fine Print First

Buying a condominium without studying the building’s finances can land a buyer in trouble.

Here are some important factors for your condo buyers to review:
  • Examine current assets and liabilities to see if there’s enough money to pay current expenses.
  • Examine the reserves to see if there’s sufficient money so maintenance and regular expenses won’t be drastically affected if an emergency arises.
  • Ask to compare at least two years worth of financial statements to make sure spending is consistent, a hallmark of good management.
  • Find out if the building is regularly spending money on repairs and upgrades. Letting this kind of maintenance pile up can foreshadow big bills later on.
  • Read a year’s worth of condo board meeting minutes for any suggestion of contingent liabilities, which suggests there may be a lawsuit in the wings. While lawsuits usually are covered by insurance, you’ll want to know whether it’s a litigious board.

Source: The New York Times News Service, Teri Karush Rogers (04/20/07)

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