Make Your Offer Subject to an Audit

When you buy a condo, you’re investing a lot of money, time, and energy into what will hopefully be a happy home. To make sure this doesn’t turn into a disappointment, make your offer subject to your approval of the association’s financial documents. It should be the seller’s responsibility to get you the following paperwork from the association:

1. A copy of the association’s financial statement.
2. Copies of bylaws, CC&Rs, and articles of incorporation.
3. Copies of the minutes for the last six to twelve meetings. If there aren’t any, that’s not a good sign.
4. A copy of the reserve study that outlines the repairs that can be expected in the future and how much of the current assessment is going into that fund.

For example, if the project has 200 units, a clubhouse, and a swimming pool and there’s not enough money to meet future pool and reroofing costs, you’ll be buying into steep assessments in the future. These documents, along with talking to at least three residents in the project, should give you a good idea of whether this community is for you. All this homework is worth it if it’ll save you costly selling and moving expenses later on.