New Condo Rules on the Way?

Sometimes good ideas have unintended consequences.  New condo rules working their way through legislature may be an example.

Condos are residences that are individually owned , but have a common ownership interest as well.  For example, I own the space including the interior walls, the floor, and the ceiling.  But, with all the other owners, we share the roof, the driveway, the exterior, the external utilities, etc.  If anything needs to happen with any of those common areas, it is paid for by the condo association.

The association’s budget comes from association fees (condo fees) that are paid by each owner, usually monthly.

There are also rules about what can and can’t happen in the units. 

Because there are rules, a budget, and common ownership, condo developments also have a board (president, vice-president, treasurer, secretary, etc.).

So far so good.  That all makes sense.  Whether a development has 200 units or three units, there’s still going to be a budget, rules, and a board.

New legislature is going to define the duties of the association boards.  There are time frames dictating when budget information is to be given to prospective buyers.  There are time frames within which association minutes and memos are to be given to owners. 

The intentions are good, but here in Montpelier, the board members are volunteers. They have jobs, families, and lives, yet choose to serve the condo community.  These people are going to be asked to operate under stricter timeframes, and stricter regulation—on top of everything else they do.  This isn’t really much of a burden in big developments that are professionally managed.  But volunteers are different.

Another interesting point about condos is that there are limits on the number of units that can be rented.  Some associations have firm limits (say, no more than 25% of the units can be rented).  But others don’t have such clear definition.  The potential problem is that lenders care.  Lenders are not going to be able to offer conventional financing for units if less than 30% are owner occupied. That means that if your neighbor rents their condo out,  and yours is for sale, your buyer may have to pay a higher interest rate.  Hmmm…

Montpelier condo associations are looking closely at both of these items.  There are real effects to real people.  Just know that, as with other important decisions in your life, that you get solid professional advice regarding buying or selling a condo in Montpelier or Barre.

For more about the local real estate market, visit www.MontpelierBarreRealEstate.com.

Be smart.  Remember Ray.