Table of Contents
- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
Introduction to Condo Association
There are different types of homes out there when you are planning to buy one like single-family homes, multifamily homes, townhouses, etc. One of the most common types is a condominium.
When you buy any single-family home, you have to be associated with a homeowners association.
Similarly, when you purchase a condominium, you have to be associated with the condominium association.
In this post, we will understand what is a condo association in detail. Before we dig deeper into condo associations, let’s first know what is a condo.
What Is A Condominium?
Condominiums are real estate properties in which the owners separately own their air space inside the interior walls, ceiling, and walls of their unit.
However, they jointly own an interest in the commonly shared areas such as a lobby, swimming pool, landscape, land, parking lot, etc.
In addition to the mortgage payment on their units, each condo owner is also liable to pay a monthly fee to the condo association.
What Is Condo Association?
A condominium association usually starts with the developer purchasing some raw land and creating a planned community development scheme.
A planned community development scheme is just a fancy way of saying that the developer wants to design property and have that design last forever.
That design can include houses it can include high-rise units, can even include a mixture of residential and commercial units.
The developer starts off creating the condo association by filing in the county clerk’s office where the association is located a subdivision plat and declaration.
The declaration is important because it specifies how many units comprise the condo association as well as the percentages of ownership that each unit has within the condominium association.
And it is through these percentages that the association divides the expenses amongst the unit owners.
For example, if the yearly expenses for the association are $120,000 with five units with a 20% ownership percentage each unit, each unit owner would be responsible to pay $24,000 every year in regards to upkeep and maintenance of the association common areas.
The other reason why the declaration is important is that it is a document that subjects the homeowners to rules and restrictions on the property that they have to buy.
These rules can include but are not limited to what the unit owner can use his property for, what type of appearance the unit owner has to maintain with his property, or any other restrictions the developer places on that unit.
How Are The Condo Association Rules Enforced?
The condo association enforces its rules by forming a legal entity that is named within its declarations.
This legal entity is created by filing the articles of incorporation with the particular states’ secretary’s office.
Most declarations require that the governing entity be a not-for-profit corporation. Usually, when you see the COA’s name ending with the abbreviation inc., it is referring to COA being a not-for-profit corporation.
As a not-for-profit corporation, the entity is required to have a minimum of three boards of directors.
And it is the unit owners that elect the board of directors to the legal entity. The election of the board of directors usually happens at the annual meeting held every year for the legal entity.
What Are The Responsibilities Of A Condominium Association?
The Condo association is meant to be the voice for all the homeowners. When a condo board comes together, they are there to ensure and enforce bylaws, and maintenance of the common areas, ensure that everything is maintained and the value of the property is always there for all the homeowners.
The condo board is also responsible to make any changes to the bylaws and rules withi9n the condo association. However, it has to be agreed upon by at least 75% of the members to make those changes.
The other responsibility of the condominium association is to select the management company for managing the common property.
The condo board has the ultimate decision over the management company because the homeowners as a collective can decide who they want to employ to manage their development.
The condo board of members makes the final decision whether they continue with the same management company or go in a different direction and employ a different management company for the development of the common property.
The final responsibility of the COA is to make sure that the association fees and dues are collected. This will ensure the smooth development and maintenance of the common property.
Conclusion
If you decide to buy a condominium, it is important to know that a condo association works a little differently compared to HOA.
You will have the benefit of getting the common area maintained and developed by the association, however, you might have to follow the rules and bylaws set by the association as well.
Make sure that you speak to your real estate agent and understand the laws and rules of the association before buying the condo in that association.
It sure was helpful when you said that the common areas of a condominium can be maintained when an association management company is hired. This is something that must be considered by condominium owners. I would assume that the right management company could ensure that the building is going to be maintained properly.
A condo association is a group of owners of units in a condominium who come together to make decisions about the property. The association is typically responsible for the upkeep and maintenance of common areas, such as the swimming pool, lobby, and other shared amenities. It also helps set rules and regulations for the building and handles any disputes that arise between unit owners. As a member of a condo association, I understand the importance of working together and respecting one another’s rights. We are responsible for making sure that the common areas are well-maintained and safe for all residents. Additionally, the association helps create a sense of community within the condo building, as members can socialize and come together to make decisions about the property.