| WHAT IS A CONDOMINIUM? |
A condominium is an individual unit within a grouping of buildings. Generally you purchase the individual unit and a percentage of all of the common elements in the building.
There are other forms of common ownership such as town homes, and co-ops that have common elements, and for purposes of this article are called condominiums.
|
| WHAT ARE COMMON ELEMENTS? |
They would include the roof and structure. Depending on the design of the building, they would also include portions of the electric, plumbing, and heating systems. Each property is different. You or your attorney would have to review the legal documents to answer this precisely.
|
| WHAT LEGAL DOCUMENTS? |
Legal documents would include the condominium declaration. There should also be a RESERVE STUDY, and a BUDGET.
|
| DOES HOME RATERS INSPECT CONDOMINIUMS? |
Yes. We inspect the unit. Depending on the building and your needs, we can also perform a limited inspection of the common elements.
|
| CAN HOME RATERS DO OTHER THINGS FOR THE CONDOMINIUM ASSOCIATION? |
Yes. We have licensed Professional Engineers on staff and can separately perform AN ENGINEER’S RESERVE study. Only a Professional Engineer should perform reserve studies.
|
| WHAT IS A RESERVE STUDY? |
An engineer inspects the building. He estimates age and remaining life of common element components. He also estimates replacement costs. Based on this, he then prepares a recommended sinking fund for each component. The Condominium Association can use this document as a guideline to develop reserves in order to replace an item.
As an illustrative example, if a roof is ten years old and it would cost $5,000 to replace it in five years, the building should collect $1,000 per year. At the end of the five years, the association would have enough money to pay for a new roof without a special assessment. In this example, if there were 10 units, each owner would have to pay $100 per year for the planned replacement of the roof. Considering the time value of money, this comes out to about $8 per month per owner for the future roof replacement.
Each common element component, such as roofs, porches, structure, electrical and mechanical systems, etc., is evaluated in this manner.
Having adequate reserves makes a building more desirable and more marketable. Adequate reserves are the hallmark of a well-managed building.
|
| HOW DO WE GET A CONDOMINIUM/PROPERTY RESERVE STUDY FROM HOME RATERS? |
Simply call our office or Request an Inspection online.
|
