Real Estate and All That Jazz: Buyers: 7 Questions to Ask Before Buying a Condo.

You've found your dream condo and are ready to relax among the mango trees and swaying date palms. Hold everything. To keep from getting
stuck with a lemon, you've got to do some homework. Here are the seven most important questions you need to ask before buying a condo.

1. "What's the Beef?"

Take a look at the minutes of the condo association board meetings to see
what the owners have been griping about. If everyone was complaining about
the faulty plumbing or the gardener's absence, you know that the complex is
having management difficulties. Even if there aren't any complaints, reading
the minutes will reveal the sorts of projects that are under way at the
complex -- projects the seller may have neglected to mention.



2. "Who's Been Naughty and Who's Been Nice?"

Find out the delinquency rates of present owners. If people aren't paying
their association dues on time, that is either a sign of discontent or an
indication that the association might be underfunded.



3. "How Much Is In the Repair Fund?"

Ask if the community has done a reserve-fund review in the past five
years. Lester Giese, the author of The 99 Best Residential & Recreational
Communities in America, recommends the following formula: If the complex is one to 10 years old, the reserve fund should have 10% of the cost of replaceable items (roofs, roads, tennis courts, etc.). Between 10 and 20 years old, the repair fund should be at 25% to 30%. At 20 years, that amount should be 50% or above. Residents who brag that they don't pay much in maintenance may be in a complex that either is not being kept up well or is living beyond its means.



4. "Can You Cover Me?"

If you look at nothing else, get a copy of the certificate of insurance,
which is a summary of the association's policy. First see if the replacement
costs covered by the policy are an accurate estimate of the cost of
rebuilding. Then make sure that the policy has a building-ordinance clause,
which means that the insurance will cover the cost of bringing the building
up to code if there is any rebuilding to be done. On older buildings, there
may have been many code upgrades since the time of construction. Finally,
make sure that you understand exactly what the association policy covers and
what you are responsible for. The smart condo owner will insure his or her
personal belongings, along with any other items within the unit that are not
covered by the association's policy. If you have trouble understanding the
insurance lingo, take the insurance certificate to an agent whom you trust
and who understands the state laws.



5. "Does the Association Present Any Legal Problems?"

Buying a single-family home without a lawyer is no big deal for many
people. But with a condo, there's so much more involved. Contact a local real
estate lawyer and have him or her go over the bylaws of the association. Do
they make sense? Are they consistent with the state laws? Giese, the author,
once found that the association bylaws of a large garden-style condo complex
had been lifted from the books of a high-rise condo, leaving confused tenants
with rules about shared hallway space and the correct use of garbage chutes.
Benny Kass, a Washington real estate attorney, recommends that you also have your lawyer screen the association at the local courthouse, to see if any
owners have filed suit against it.



6. "Is the Complex Renter-Friendly?"

If the renter population is over 10%, there should be clear rental
policies, either listed in the bylaws or tacked on as an amendment. Does the
management company find renters for you? If so, do they get enough good renters?
Ask other tenants about their experience. In addition, ask to see the
association's rental lease, and have a real estate lawyer look it over. Keep
one thing in mind, though: An association can change its bylaws to prohibit
or restrict renting at any time. The more owners who rent, the less chance
that will happen.



7. "Am I My Community's Keeper?"

Watch out for a condo whose owners manage the place themselves. Although
many are operated efficiently, self-management can lead to more hassles for
owners -- especially those who live thousands of miles away. If the complex

• is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners. Ask people in nearby buildings. And be sure to interview the day-to-day manager directly. If you hook up with a bad manager, you can be sure of this: Your dream condo will keep you up at night.
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