In New York City, condos offer great opportunities for homeownership as well as a valuable investment. But when you buy a condo in NYC, it can feel daunting, and you should consider possible pitfalls before you head out on your search.
Condos are managed by a board of directors composed of a group of unit owners who oversee the general operation of the building. The upkeep, expenses, and insurance for the building rely on regular monthly or quarterly fees paid by all unit owners to the condominium association. The board typically contracts with a management company that collects the maintenance fees and takes care of the day-to-day management, accounting, and upkeep of the building.
Before you buy a condo, speaking to an experienced condo real estate lawyer may be able to help avoid mistakes and get the best out of your purchase. Speaking to an experienced real estate lawyer at Sishodia PLLC may be able to provide you with the legal support you need when buying a condo. A skilled lawyer understands the challenges involved in buying a condominium in New York. Contact us today to schedule a consultation. Here are a few red flags that you should consider before buying the condo you are looking to purchase.
Condos with Poorly Maintained Common Areas
When purchasing a condo, you are not only buying the unit itself but also a proportionate share of the building and all the common areas and amenities. You will want to ensure that the building that your unit is in is properly taken care of and well-maintained. Buildings that are poorly maintained often have other problems under the surface and can lead to more significant issues down the road, so they may not be the best option for you.
Building Construction Issues are Red Flags when Buying a Condominium Unit
You will want to look closely at the construction of the inside of your unit as well as the building itself. Developers who cut corners are gone after the building is sold out, leaving their poor construction problems to the people who are now owners of the building.
Condos with Very High Maintenance Fees May Not be the Best Option
The association must keep a full accounting of all the costs and expenses regarding the building’s upkeep and maintain a budget. If maintenance payments seem unreasonably high, there may be issues with who is overseeing the budget and how maintenance money is being spent. Condos with this kind of issue are not the best option since this can bring problems in the long run.
Condominium Units With Very Low Maintenance Fees May Also Not Be the Best Option
Conversely, when maintenance fees seem too low, it may indicate that there may be a shortfall when needed. Condominiums are required to keep reserves for these reasons. If there is an emergency and there are no funds in reserve, the residents will be left to make up the difference through special assessments. Condos that don’t seem like they are maintained very well can pose risks and significant issues to their buyers in the future.
Residents Who Are Not the Best at Paying Their Maintenance Fees
Another critical red flag when buying a condominium unit is when other owners are not paying their monthly fees in a timely fashion. When the board must pursue foreclosure on non-paying unit owners, it results in serious expenses to get non-paying owners out of the building.
The Residents’ Reluctance to Provide Information Can be a Red Flag when Buying a Condominium Unit
When a condo association or management company is reluctant to provide information, budgets, minutes, or other details to potential buyers, this lack of transparency should be a serious red flag.
Residents Who Are Not Happy
Speaking to other owners can give you further insight into the building you are looking at. If several owners are unhappy with the board and management of the building, you should consider this a warning.
If the Culture Is Not the Best Fit for You, It is a Red Flag
Condo living is in close proximity. Some condos have an overarching culture, and your level of comfort as a unit owner may depend on how well you fit into it. If you do not fit in, that building may not be your best choice.
The Advantage of Buying a Condo
The biggest advantage condos have compared to co-ops is that condos are by far easier to buy. Unlike co-ops, which have a managing board that can subject tenants to restrictive rules on occupancy and subletting, you have the freedom to use a condo as your primary residence or have someone else live in it. All that matters when buying a condo is that you have enough funds to pay for your purchase. When you buy a co-op, you may be subjected to an interview with the Board of Directors where your application to purchase is still subject to approval. This is one of the main reasons why foreign investors have an easier time purchasing condos.
Condos may be the better choice for speculative investors. While prices understandably fluctuate as a response to the real estate market, condo buyers have the freedom to take on as much or as little risk as they like. Co-op purchases may require buyers to pay 20% of the down payment or a 25% debt-to-income ratio which can be a turn-off for speculative investors. For condos, you can purchase a property condo with as little as 10% of the down payment with any other debt-to-income ratio you desire as long as your lender agrees.
Getting the Legal Assistance of an Experienced New York City Real Estate Lawyer Before Buying a Condo
Choosing the right condo is essential from a personal and financial standpoint. While you should have a real estate agent who is well-versed in condo sales, it is also crucial to know what to look for while doing your due diligence.
Natalia Shisodia and her team of skilled NYC real estate attorneys can help you understand whether a condo unit may or may not be right for you. Contact us at (833) 616-4646 or schedule a consultation through our online contact form.
