February 9th, 2024 2:50 PM by Linda Holley
Why are people buying new homes in Sarasota Florida and new homes in Manatee County? Because older condo communities must plan for roof replacement, asphalt re-paving, building maintenance, and landscaping. When the money runs out, owners pay out of pocket for special assessments. If there's no money, the condo Association gets a bank loan.
A friend lives in a condo built in the 1970's. Here's projected expenses they must plan for: termite reserves; well pump; carports, fitness equipment; stormwater catchbasin, and exterior painting/waterproofing. They may not live long enough to see all of this work done. But some senior citizens in Over-55 communities are just hoping to heaven before their condo community goes to hell. They vote down raising fees for maintenance and repairs. Sounds like the Surfside condo community in Miami where 98 people died because the residents voted down costly repairs. Younger residents want to scream when they realize they've bought into a community like this!
Good pool heaters for a large pool can cost $27,000 and if it goes out of service earlier than expected, it's a financial squeeze. It sometimes happens that funds must be moved from the reserve account sooner than in the financial plan. That can really hurt if a major expense occurs, such as hurricane damage.
Boards of Directors have a tough job making decisions about covering expenses without increasing fees beyond what people can afford--especially those in Florida on fixed incomes. The answer is getting an updated reserve study every five years prepared by an experienced appraisal and consulting company.
If you're buying a condominium in Florida built before the year 2000, be sure you are working with an experienced buyer's agent in Sarasota. Get a copy of the minutes for board or annual meetings. If they don't give you the minutes, you can request them after you're under contract. IF YOU DON'T GET THEM, BUYER BEWARE! If you find that there has never been a reserve study done, run like your hair's on fire!
You're looking for truth and transparency. Do an online search to see if that condo association or their management company have current or previous lawsuits. Before you buy, drive through the neighborhood, stop and talk to people. Just ask, "Are you happy here? Do you have past or upcoming special assessments?" Dog walkers love to stop and chat and they're not afraid because their dog will protect them, even the chihuahuas and poodles, right? Choose a lady in her 60's or 70's out walking chihuahua. She'll love to bring you up to date on the expenses and her board of directors, too! :-) Just smile and reply, "You don't say....that's great information, thanks!" This will make her day as she's probably fed up with her board, too. :-) Dog walkers know what's going on and they keep other dog walkers in the neighborhood informed, too, as they are trotting around with their best little friends.
Some Boards of Directors must have their feet held to the fire to correctly apply the condominium governing documents. When in doubt, they should ask for a legal opinion. Boards that shoot from the hip and guess the meaning of the governing docs are practicing law without a license. For some reason, they are afraid they'll look dumb if they say they don't know the rule so they'll check on it. That's one of the first thing I learned as a professional analyst with Department of Defense: don't make up an answer - just say you don't know and get back with them with the correct answer.
Don't spend too much time worrying about the condo docs and rules before you buy. After you are under contract, you have time to review the documents and terminate your contract if you're not happy with what you've learned. Just remember, when you drive through a community, regardless of when the property was built, "What you see may not be what you get." Your Realtor should keep your feet on the ground when you fall in love with a house. Listen and walk away if your research gives you that gut feeling that this place isn't for you.
Buyers getting a mortgage have a good opportunity to have their loan officer disapprove the loan and cancel the contract. I actually called one lender and said, "Don't approve this loan...there are financial problems ahead." Loan was disapproved, the buyer received his deposit back, I found him another property, and he's a friend for life.
Linda Holley, Realtor, GRI, SRES, CIPS, Fine Properties, 941-914-4914
www.LindaHRealtor.com
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