Condominium FAQ
This document is provided for your information. It does not constitute legal advice from Sigman Law Office, P.C. to you. Legal advice is provided only after an engagement letter is signed by you and us. Q. A. What is a condominium? A condominium is a form of ownership that allows multiple owners to live in the same building or buildings while retaining an ownership interest in the property. Each unit owner owns a unit in the building and holds a certain percentage interest in the common areas and facilities of the property. The owners maintain the common areas together in an entity (usually a trust) which is more commonly referred to as the unit owners’ association. Each unit is separately taxed as if it is a parcel of land. What are the advantages of Condominium ownership? The primary advantage is that you get most of the benefits of homeownership without many of the hassles. You can build equity and not have to pay rent to someone else. Many of the repairs and maintenance to the building and the common areas are paid for by all of the unit owners through their condo fees. If the roof leaks or the basement floods, the condominium association would have to fix it and pay for it out of the condominium budget. If the budget is done correctly, then it will simply be added to your monthly condominium fees for the next year. What are the disadvantages? The primary disadvantage to condominium ownership is that you have fewer rights than you would as the owner of a house. You have to deal with other people living in the same building. It can be similar to living in an apartment but with more responsibility. You also only own from the walls in. Therefore if you want to do any improvements to the condominium you will most likely have to gain the approval of the trustees/unit owner’s association (even if it doesn’t involve the common areas). There are commonly many rules and regulations that you have to abide by. You should always review the condominium documents with your attorney prior to signing the purchase and sale agreement to see if you can comply with the various rules. This is a service that Sigman Law Office provides with our flat fee buyer representation. Remember, many condominiums have restrictions on pets! What is a master deed? The master deed is a document that conveys the property to a managing entity and submits it to the laws of c. 183A. It contains descriptions of the land, the building and the units. It creates any easements for parking or other uses and places restrictions on the use of the units.
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What is the Declaration of Trust? M.G.L. c. 183A requires the recording of a document creating a condominium association. This is commonly a trust. The document sets forth the requirements of the trustees, the bylaws and rules and regulations of the condominium association If I own a condominium unit, what do I actually own? You own from the walls of your unit inward and the utility lines servicing your unit (wires, pipes, heating ducts, etc.). Sometimes, a unit will have a parking space, storage unit, porch, deck, patio, etc. This is actually not part of the unit; you own an exclusive easement (right to use). What are the common areas? Generally, common areas include: hallways between units, doorways, the roof, the exterior of the building, the land upon which the building is located, the space between the interior and exterior walls, and any driveways or parking areas. It is the sole responsibility of the condominium unit owners’ association to maintain and repair these areas. For example, if the roof leaks, the condominium association will have to pay for the repairs. How is the percentage interest determined? Percentage interest is determined by dividing the initial market value of your property by the market value of the entire condominium project. The asking price for a condominium is often used to calculate this because it is based upon the square footage of the unit. Your percentage interest determines how much responsibility you have for the condominium fees, taxes, insurance and any other common charges. The percentage interest does not change unless the square footage of the unit is expanded. What is a condominium fee? A condominium fee is a fee based on the annual operating budget of the condominium. Each unit owner pays a certain percentage of the budget based upon their percent ownership in the condominium. Although the percentage interest will likely always remains the same, the condominium budget tends to fluctuate over the life of the condominium and therefore your condominium fee may increase. Reasons for increases are special assessments for large repairs or construction of the common areas, inflation, and increases in insurance premiums. What items are generally included in the condominium budget?
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Generally, the budget includes the master insurance premium, water/sewer, common utilities, taxes (for the first year of the condominium project only), maintenance fees for common areas, snow removal, landscaping, etc. The budget will also include a capital reserve that the association can tap into for major repairs. What if I do not pay my condominium fees? Your condominium fee is the basic building block of the condominium association. Without the fee, the condominium cannot persist. Many condominium associations will charge late fees for late condo fees. You cannot sell a condominium without paying all of your condominium fees. Back condo fees will become a lien on your property and under Massachusetts Law this lien is senior to your mortgage! If necessary, your bank will pay the condo fees for you and then go after you for reimbursement. What is meant by deeded parking? Does that mean I own the parking space? No. It is a common misconception that deeded parking means that you actually own the piece of asphalt. In reality, you own the exclusive right to use the parking space. In most cases you can freely buy and sell this right. In some cases you are responsible for clearing the space of snow and ice and maintaining its condition. In others, the condominium association takes care of the parking space. I have a deck/porch on my unit. Is it my responsibility to repair and maintain it? You should have your attorney review the condominium documents prior as they will provide the answer to this question as many condominiums will handle this subject differently. Again, this is a service that Sigman Law Office provides in our flat fee buyer representation. Generally, however, porches, decks and patios are like parking spaces: you are given an easement or right to use the area. There are commonly restrictions on how you can use it such as mounting satellite dishes, quiet hours, clutter, what you can hang, and grills. In most condominiums, the unit owner’s association is responsible for the repair and maintenance of the structural portions of the deck or porch. You are responsible for keeping the area in a neat and clean condition. There is a basement area in the building. Can I use it for storage? It depends upon the condominium documents. Many condominiums are conveyed with an easement to use a designated area in the basement for storage. There are often restrictions on what you may store in the basement area. If you are not specifically given a basement area for storage do not put anything down there unless you receive written permission from the condominium association.
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