What Is a High Rise Condominium?

What is a high rise condominium and is it a good choice for you? There are tremendous benefits of owning one of these such as luxurious amenities and someone else taking care of all of the maintenance duties. There are also some important drawbacks to living in a high rise condo. In this article we will take a look at the ups and downs of this type of home.

The first point about living in a high rise condo could be taken as either a positive or a negative depending on your personal habits. Are you a packrat? If you are, keep in mind that space is a desirable commodity in a high rise condo. You typically pay for square footage in this type of home. So you must ask yourself if you want to pay for storing junk. If you do not, you can take this as an opportunity to part with some of your junk. If you cannot bring yourself to do this, perhaps a high rise condo is not the correct type of home for you.

If you love your pets; as most of us do, beware that there may be strict rules governing a high rise condo pertaining to pets, especially dogs. There may well be restrictions on the size and type of dog you can have. Even in those buildings that do allow dogs you must be certain there are enough green areas to walk him. Do you really want to truck three or four blocks away to the nearest dog park on a bad weather day? There also may be restrictions on more exotic types of pets, even if they are small. If you do not want to be forced to part ways with your furry (or scaly) babies, a high rise condo probably is not right for you.

Do you live a relatively noisy lifestyle? Do you like to listen to music late at night or perhaps have young and active children? If yes, then a high rise condo is definitely NOT the place for you to live. The majority of them have strict rules about noise control. What may seem like harmless sound to you could be considered a racket by your neighbors. You may find yourself contacted by an HOA officer or even visited by a police officer if you violate the building’s noise restrictions.

Do you plan on leasing out your high rise condo unit? If so, be very careful here. Some buildings absolutely forbid this altogether. Others have umpteen restrictions on who you can lease to and how your terms must be structured. Some buildings will even require your prospective tenants go before the resident condo board for a stringent evaluation.

We are not saying that living in a high rise condo is a bad thing. We are just saying that the rules for such housing can be very strict. BEFORE you buy a unit there, do yourself a favor and completely read the building’s rules. You may save yourself a lot of headaches.

Condominium Pet Policies – Making Sure Your Pet Is Allowed

Most of us love our pets as much as we love our children. We would never dream of giving our children up. So why should we be forced to give up our pets. Yet many pet owners are “forced” to give up their pets because they found a seemingly wonderful condominium complex to move into; but they DID NOT READ the rules governing pets. They found themselves unaware that the complex either had restrictions on pet ownership or forbid pets altogether. This type of scenario can be avoided if people just read the relevant documentation governing pet ownership for their prospective condo complex first. They do not HAVE TO choose a complex that restricts pet ownership.

Some condo complexes are very strict when it comes to pet policies. Some allow only small pets. Some restrict the breeds you can own there. Some limit the number of pets you can have. While some complexes; as we already mentioned, do not allow ANY pets of ANY kind AT ALL. The best way to avoid this happening is to ask the condo complex manager about pet ownership in the first place. Do they allow pets? Are there any restrictions on pets? If they do not allow your pets, MOVE ON to a different complex. Sure this one may look wonderful. But what is more important; living in that exact complex, or your furry babies? You DO NOT have to select a complex that does not allow your pets.

If you want to move into a beautiful condo complex and you have pets, take some time to scout around first. There are many wonderful complexes that will allow them. They might have restrictions on how many pets you can own, but that is actually reasonable. At least they allow them. If you have a lot of pets, a condominium complex is not the right place for you to live anyhow. In that case you should have a yard for them to run around in. But do look around first. Ask pet-related questions of each condo complex’s management. Find out ahead of time if they will allow pets. If you are happy with having one or two small pets, then a complex with moderately strict rules may be appropriate for you. In that case you would not be required to choose between luxury and your pet. In either case, do search for just the right complex for you and your babies. Do not just blindly move into one.

Even once you think you have found the perfect condo complex to move into with your pets, read the lease agreement thoroughly before you sign it. Complex managers are human, humans can make mistakes. It is highly possible she was mistaken about their pet policies. If so, it will be spelled out in the pet section of your lease agreement. Make sure you do your homework before moving in. Otherwise you could find yourself having to give up your best friend.

Condominium Management Fees: The 5 W’s and a How

Management fees are generally in the top five of the highest expenses within a Condominium Corporation’s annual budget. As volunteers on the Board, you each have your own personal expertise, but require the assistance of a professional manager to guide your decisions, advise of your regulatory obligations and handle the daily tasks of administering the business of your property.

Who sets management fees? Like every industry, condominium management is a competitive field. Management companies will set the fees (often this is done on a “per door” basis), but its very important to understand what is included in the price quoted and more importantly, what is not included.

What do fees include? Be VERY cautious in researching this aspect – unfortunately you may not, or even worse, sometimes may, get exactly what you pay for.

– The first consideration should be not only the company’s experience, but that of their staff member assigned to your property as Manager – often, you will find companies with lower fees because they hire administrative professionals and “train” them to be managers – you will want more than you’re paying for in this situation if you care about your investment.

– A second scenario regarding lower fees involves “buying” your business – the first year contract will be at the low-end of the market, but significant increases will be implemented each year thereafter (while it may seem like a cost-cutting measure to do this the first year and then change to another company, you will cause no end of grief and substantial expense by constantly changing managers).

– The third situation involves a low monthly fee quoted up front, but remarkable extra charges incurred after the contract is signed – often, these are not even itemized – you will simply see hundreds of dollars in additional administrative costs on your financial statement each month. If and when you get an explanation of these costs, it is often a vague reply, citing photocopying, land titles costs, courier expenses, etc. While these are legitimate charges – make sure they are itemized, with copies of invoices or details attached. This practice will cost you many thousands of dollars more over the long-term than a slightly higher fee from another company with realistic monthly fees and transparent invoicing.

Where will we see the benefits of our management fees? You will see the benefits of hiring a reputable, ethical professional in your property values. Thorough, accurate financial and legislated record-keeping; attention to regular maintenance and replacement issues; enforcement of bylaws and an appropriate reserve fund will be worth far more to today’s savvy purchasers who often hire professionals to review the Corporation’s affairs in detail, prior to purchasing a unit in your property.

When should we be concerned about fees? Obviously, lower fees should set off some alarms; conversely, higher fees should be completely justified. The rule of thumb in any tendering process is often to throw out the lowest and the highest – where all factors are equal, this is the simplest method. Just be sure that you look very closely in comparing services, terms and critical practices as well as qualifications such as experience, consistency and prompt, regular communication.

Why should we research a variety of fees? Often higher-end or, the “good” companies, will offer flexible service contracts – if you have a 12 unit property – you may only need assistance on a consulting basis or perhaps partial management services. At the other end of the scale, a 400 unit high-rise with older bylaws, special assessments and multiple insurance claims, may opt for an all-inclusive, comprehensive full-service contract. Carefully review the services proposed for the price quoted and consider your needs – don’t pay for what you don’t need and make sure what you need is included and not priced as an extra – surprises in this regard are never pleasant.

How do we make sense of the fees? ASK the questions and be sure you get a satisfactory answer before you move forward. It’s always prudent to get answers in writing and if you’re uncertain about what to ask; speak to friends, family, colleagues or consult with the local professional organization or an industry advocate to get some ideas. Make sure you’re comfortable with a) the services offered, b) the apparent knowledge, experience and skill of the person appointed to your property and of course, c) with the fees proposed in relation to value for your money.

Remember that condominium management is not a creative process – there are some very set, critical tasks that must be accomplished by every manager. What you must consider, is the depth of knowledge, variety of experience, availability, commitment and professionalism that will allow you to be comfortable in trusting the guidance and assistance you’ll be paying for.

Your Condominium Manager: Control-Freak or Nurturer?

Is your Board-Manager relationship dysfunctional? If you’re butting heads constantly or just can’t seem to get things done, you’ll need to examine the individual management styles of each and find some common ground.

This subject involves the management style of both the Board of Directors and the Manager and for each, there are two distinct styles. A newly-elected Board at the same property can be very different in its preferred style, from the previous Board, so this is a dynamic condition. The Board may be very involved, very hands-on and prefer to direct their Condominium Manager with specific and detailed instructions; or the Board may prefer that the Manager be very proactive and look after things with as little of their involvement as possible. With either management style, you as a Board should understand that no matter your preference, decision-making is still the Board’s responsibility – not the Manager’s. Allow me to reiterate this: decisions are not the Manager’s responsibility – even if you would prefer it that way.

For the Involved Board, your Manager will take direction and carry out the specific tasks you (reasonably) request of them (an example of this involves the Vice-Chair who regularly walks the property and sends a list of maintenance items and by-law infractions to the Manager to engage the contractors and send letters to the offending residents). For the Less-Involved Board, your Manager should advise you of maintenance items and by-law infractions and while they may act within the authority allowed to them by the Management Contract, they must still report to the Board and should have such actions ratified by the Board.

Whichever your style, be sure that both your Board and your Manager have a clear understanding of your preferences and of the specific procedures and expectations involved by both parties. The real caution in all this, is the style of the Manager. I have worked with many Managers over the years who, while yes, may have the knowledge and experience to tell you what the “right” decision is or how to handle things or who may even move forward and do them on your behalf. Many, in the interests of expediency or ego or both, forget that the Board must make the final decision. This should not be confused with the Manager’s job to provide solid information (or to complete certain tasks for which they have the authority or are responsible to perform according to your agreement) – this is intended in respect of actual decision-making.

Your Manager should provide guidance, professional advice, experience-based reasoning and all the research that the Board needs to make an informed decision, but he or she should never lead, point or otherwise influence the Board’s choices. We’re speaking here, of decisions such as: which of the three quotes to choose; whether or not to evict a tenant; or if a contractor’s job has been completed satisfactorily. Although some Boards prefer to have their Manager tell them which is the best choice, your Manager is a Facilitator, not a Dictator and should be proficient in assisting you to make the best choice – never to tell you what the choice should be. Because the final responsibility rests with the Board, your duty is to draw a line and be vigilant that this line is not crossed.

The Board carries some large responsibilities – if the Manager you’re paying is not fitting in with your style – find someone who will.

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Condominium Formation and Conversion – Rhode Island

Q. What is a condominium and how is it formed?

In Rhode Island, a condominium is any real estate project which includes individually owned units (i.e. a residential unit) and common elements (i.e. general common elements and limited common elements) that are owned by the unit owners as tenants in common.

A condominium is created in Rhode Island by recording a declaration of condominium with the appropriate office in the city or town where the project is located. The declaration must be drafted in accordance with the Rhode Island Condominium Act (the “Act”) for all condominiums created after July 1, 1982.

Q. What are the bylaws?

The bylaws are the rules of the condominium. The bylaws are enforced by the association’s elected officials. The bylaws can be changed with a certain percent vote of the unit owners of the association. A buyer should always review the bylaws carefully prior to entering into a purchase and sales agreement. Buyers are sometimes surprised to find out that representatives of the association are allowed to enter the buyer’s unit; pets are not allowed; or a buyer is not allowed to alter the exterior of their unit without the permission of the association.

Q. What is a condominium unit? What is a general common element? What is a limited common element?

A condominium unit (i.e. residential living space) is the area that a unit owner has exclusive ownership interests in.

A general common element is owned by all of the unit owners as tenants in common with each other and all unit owners have the right to use and enjoy a general common element (i.e. a road).

A limited common element of a condominium is owned by all unit owners as tenants in common with each other. However, only one unit owner or a limited, specified group of unit owners have the right to use and enjoy a limited common element (i.e. a patio, driveway, or porch).

Q. What is a condominium purchase and sales agreement?

A condominium purchase and sales agreement is a contract to buy and sell a unit. Many residential sellers will use a standard purchase and sales agreement form. However, there are a many different purchase and sales contracts available. It is always advisable to have an attorney who is experienced with condominium law to review or draft a purchase and sales agreement prior to signing any such agreement.

Q. What is a public offering statement?

A public offering statement is a summary of the declaration and includes important information relating to the condominium. A public offering statement must be drafted in accordance with the Rhode Island Condominium Act for all condominiums created after July 1, 1982. A buyer has the right to cancel the purchase and sales agreement within 10 days after the receipt of the public offering statement. A seller who is required to deliver a public offering statement to the buyer will face penalties prescribed by the Act if the seller fails to provide a public offering statement.

Q. Is a public offering statement required prior to the closing of all condominiums?

A public offering statement is required by any declarant or person who is in the business of selling real estate when that declarant or person offers a unit for sale on his own account to a purchaser of a condominium unit.

A public offering statement is not required in the following instances: i. if the condominium contains 12 units or less, is not subject to further development rights, and the declarant has owned the units for more than 2 years from date of first sale; and ii. nonresidential projects where all of the units are nonresidential or in residential projects where waived by agreement; and in the following instances: disposition or transfer by gift; court order; by a government agency; foreclosure or in lieu of foreclosure; disposition or transfer to a person in the business of real estate who intends to resell the unit; and when the purchase and sales agreement may be cancelled without penalty by the buyer.

Q. What is a condominium resale certificate? When is a resale certificate required prior to the closing?

A resale certificate is prepared by the association upon the request of a unit owner who is selling his or her unit. The resale certificate contains important information and must be drafted in accordance with the Rhode Island Condominium Act.

A resale certificate is required for all sales when a public offering statement is not required. However a resale certificate is not required if a public offering statement is exempt as explained in the previous question.