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The
Real Estate Lady®, talks Condominium-ese.
The following are Bookmarks. Enjoy! |
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Condominiums: The Language |
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Airspace - assessment...
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Air-space, parking space, storage
space... what's it all about?
Some complexes have separate clauses about parking spaces and about storage
spaces. Be sure to read the documents thoroughly. The courtyard at 400
North Church.
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| Board of Directors -
By Laws
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| Commercial Condominium -
Co-operative
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| Declaration - duplex |
| First Right of Refusal -
House Rules |
| Limited Common Areas -
On-Site Manager
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| PUD
- Quadplex |
| Reserves-Special Assessment
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| Tenant Shareholder-Voting
Rights |
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Airspace: That space in a condominium complex which belongs to the
unit owner. It is the area contained in a unit from floor to ceiling
and wall to wall measured from paint to paint not allowing for
thickness of walls, etc. |
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Amenities: The grounds of a condominium complex may include such attractions
as a swimming pool, spa, tennis courts, clubhouse, laundry, cabana,
exercise facilities, etc. See also Common Areas. |
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Architectural Controls: Rules governing the exterior appearance of
the condominium complex. Owners may be required to keep window
coverings uniform by using only white draperies or those with white
linings, for example, and to keep only certain approved furnishings
on balconies or terraces. |
Articles of Incorporation: Part of the package of documents which
must be provided to every purchaser of a condominium.
This document, when filed with the secretary of state, legally
establishes the homeowners association of a condominium complex as a
corporation in that state. It includes:
1. Name of the corporation and its term
2.Purpose, powers, restrictions and dividend policy
3.Addresses of: initial offices of the corporation, place where
business will be conducted.
4.Name and addresses of the incorporators and registered agent
5.Specifications of membership, including classes available, how
membership is acquired, cessation of membership, voting entitlement
and amendment procedure
6. How the affairs of the association shall be controlled and
managed by a board of directors, their required number, procedure
for establishment, terms in office, and the names and addresses of
the members comprising the first such board. (At the time this
document is originally filed, there are no homeowners as such; the
board will be comprised of those persons who are initiating the
entire project. When the condominium complex is constructed, and
sufficient units have been sold, control of the association will be
transferred to the homeowners.)
7. Authorization for appointment of managing agent
8. Party who has the power to convey, or encumber, the association's
property, and to execute deeds, contracts, etc.
9. Provisions for management of business and other affairs of the
association; indemnification of officers and directors against costs
and expenses reasonably incurred in possible lawsuits due to their positions
10.Authorization for the adoption of initial by-laws, as well as the
power to alter, amend or repeal them; and the right to alter the
articles of incorporation. |
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Assessment: Sum of money payable by an owner which represents a
unit's pro-rated share of common expenses. |
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Board of Directors: Persons elected by tenants-shareholders from
their peers in a cooperative apartment building to govern the
affairs of same. |
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Board of Managers: Persons elected from the membership by members of
a condominium homeowners association to govern the affairs of the
complex in accordance with the provisions of the by-laws. |
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Budget: Financial document presented for approval at the annual
homeowners association meeting which outlines the estimated
expenditures and income for the upcoming year. |
By-laws: A document which explains how the affairs of the
condominium complex shall be run. This is part of the package of
documents which must be provided to every purchaser of a
condominium. Take careful note of the fact that some of the topics
that are briefly mentioned in the declaration, receive a more
detailed address in the by-laws. Always look for information on a
particular subject in both documents to ensure that you are fully
informed about it.
Search the by-laws for particulars concerning:
1. Qualifications for membership in the homeowners association and
voting rights
2.Administration of project affairs, holding of annual and
special meetings and order of business at same
3.Powers and duties of the board of directors or managers,
including:
a. Establish reasonable house rules, and enforce compliance
b. Enforce and administer the provisions of the declaration document
c. Borrow funds and enter into contracts
d. Hire a manager to oversee the daily maintenance and operation of
the complex
e. Keep the property insured and in good condition
f. Determine and collect from each owner a monthly assessment
to obtain the necessary funds to operate the business of the
association and maintain a working capital account, and, if
necessary, to collect delinquent payments by lawsuit.
4. Fiscal management and the appointment of committees
5. Election of officers and a synopsis of their duties
6. Responsibilities of unit owners so far as monthly assessments and
individual unit maintenance and repair are concerned
7.Modifications or alterations to an individual unit, and
restrictions as to its use
8. Requirements for association to receive notice of mortgages,
proof of ownership from new owners and registration of each one's
mailing address.
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Commercial condominium: Non-residential units intended for use
as offices or retail space. |
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Common Areas (or Elements): Those parts of the condominium complex
which are owned by all unit owners together in undivided portions.
Included would be all the elements of the building itself except for
the airspace in each condominium unit (i.e. halls, stairways,
elevators, storage, parking areas), the amenities, grounds, etc. |
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Common expense: The costs outlined on the budget to maintain,
operate and improve the property for the benefit of the unit owners. |
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Complex: A condominium community. |
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Condo: Abbreviation for the term "condominium". |
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Condominium Map: A plan of an entire complex showing the location of
each unit, amenities, adjacent streets, etc. A copy is usually
incorporated into the condominium declaration document. |
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Condominium Ownership: A fee simple interest in a particular unit
plus an undivided interest in the common elements of a complex. |
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Conversion: A complex which was originally constructed for rental
purposes and subsequently converted into a cooperative or
condominium. |
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Co-op: Commonly used abbreviation for the term
"cooperative". |
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Cooperative: A multi-family complex owned by a corporation organized
for this purpose. A purchaser of shares in the corporation acquires
a proprietary lease and the right to occupy a particular unit along
with the obligation to pay a pro-rated share of the corporate
expenses. |
Declaration: This recorded document legally establishes a
condominium project. It is sometimes known as the Master Deed.
This is a vital legal document, a "bill of rights" which
creates the condominium type of ownership. Among the typical
material you can expect to find in your sample declaration will be
the following:
1.Identity of the "declarant" and statement of purpose
2.Definition of terms used in the document
3.Information regarding the condominium map and division of the
property
4.Description of limited common elements, the units, how title will
be held, and method of taxation
5.Unit use and occupancy
6.Owners indemnification against mechanic's liens when one owner
fails to pay workmen for work done in her/his unit
7. Administration and management
8.Owner's automatic membership in the association, their duties to
comply with provisions of the documents, and responsibility for
upkeep of their individual units
9.Interior remodeling of units
10. Owner's obligations to pay assessments to meet common expenses
and their right to place mortgages on their units
11. Insurance coverage for the complex
12.Owners' first right of refusal (if any) to purchase another unit
in the complex when its owner has received a bona fide offer for it,
and transactions which are exempt
13.Association's powers as attorney-in-fact, including
procedure that will be followed by the association in the event of
building damage, destruction, obsolescence or condemnation: failure
of the owner(s) to pay assessments, etc.
14. Declarant's right to enlarge the condominium complex. |
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Development: A complex or project comprised of condominiums. |
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Dues: The fee payable to the homeowners association by the owner of
each unit at regular intervals, usually monthly, to cover the
expenditures set forth in the budget. |
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Duplex: A condominium comprised of two units. |
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First Right of Refusal: See " Right of First Refusal. |
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High-rise Condominium: A multi-story condominium complex with
elevators. |
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HOA: Abbreviation for Homeowners Association |
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Homeowners Association: An association comprised of owners of every
unit in a condominium complex. With the purchase of a condominium
unit, the new owner automatically becomes a member of the homeowners
association with the right to vote on al matters regarding the
complex. |
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Homeowners Dues: (or Fee): See Dues |
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House Rules: List of policies which govern day to day living in a
condominium complex. Some may be reprinted from the by-laws or proprietary
lease; others are established by the HOA board. They cover such
subjects as: parking, noise control, hours, and use of recreational facilities,
etc. |
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Limited Common Areas: Areas reserved for the exclusive
use of a unit
owner. These would include windows, doors, and perimeter walls of a
unit as well as its decks, balconies and/or patios. |
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Long-term rental: The rental of a condominium unit for a period
longer than one month. |
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Low-Rise Condominium: May refer to a cluster of one story units also
known as Gardens. Sometimes gardens are designed in a courtyard. |
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Maintenance Fee: Cooperative Term for homeowners association fee. It
may also include a shareholder's portion of property tax, and the
payment on any existing mortgage on the building. |
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Managing Agent: A company often a real estate brokerage or property
management firm, appointed by the Board of Directors/Managers to
handle maintenance, book-keeping and the daily operation of a
complex. |
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Master Deed: See Declaration. |
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Master Insurance Policy: An insurance policy taken out on behalf of
the homeowners association to insure all the common elements of the
complex. |
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On-Site Manager: An employee of either the homeowners association or
the property management company who is responsible for the day-t-day
operation of the complex. |
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Planned Unit Development (PUD): A community consisting of
individually-owned homes and loots, surrounded by land for the common
use of all owners. The land and the recreation facilities( if any)
belong to the association whose membership is comprised of all
owners of the homes and lots. Membership is mandatory; each owner is
obligated to pay a pro-rata share of the maintenance of the association's
property. |
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Plat Map: See Condominium Map. |
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Pledge: Document signed by the purchaser of stock in a cooperative
to pledge the stock to a lender as collateral for a loan made for
the purchase. |
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Project: A condominium community during its stages of development
and construction. |
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Property Management Company: An independent real estate company
appointed by the homeowners association to operate its business. Its
functions may include collections of homeowners' monthly dues and
special assessments, bookkeeping, payment of expenses, maintenance,
repairs, rental service, etc. |
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Quadraplex: A condominium complex containing four units. |
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Reserves: Funds
set aside by the Board of Managers for use when a large common
expense arises. |
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Resident Manager: A manager who resides on-sites in a condominium
which the homeowners association owns, or leases, for this purpose. |
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Resort Condominium: A unit located in a vacation community. It is
usually owned as a second home, or for investment purposes. |
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Restrictions (or Restrictive Covenants): Regulations pertaining to a
particular complex which disallow certain factors or use, i.e. pets,
persons ho have not reached a stated age, unit occupancy for other
than residential purposes, etc. |
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Right of First Refusal: In certain condominium declarations this
clause gives the existing owners of other units in the complex (or
the board of managers) the right to purchase a condominium for the
same price, and under the same terms, as a party whose
offer-to-purchase has been accepted by the seller. |
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Rules and Regulations: See House Rules and Regulations. |
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Short-term rental: A rental of a condominium unit on a nightly or
weekly basis with a maximum of one month. |
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Special Assessment: When a costly repair or improvement to the
complex is to be made, the funds collected in the monthly homeowners
dues (or held in the Reserve Fund) may be insufficient to cover the
expense. To acquire the necessary money, each owner receives a
special bill for a pro-rata share of the cost. |
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Tenant-Shareholder:
A purchaser of shares in a corporation which owns a cooperative
apartment building. Ownership of shares entitles the buyer to occupy
a particular unit owned by the corporation. |
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Townhouse (or Town home): A condominium unit of one or more stories
in height which may be free standing but is usually attached to one
or two neighboring units by common walls. Often the owner of this
unit owns the land on which it stands and its roof. |
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Triplex: A condominium comprised of three units. |
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Undivided interest: The right of ownership in the common elements of
a condominium complex which is equally shared by all unit owners.
This interest cannot be separated and conveyed by any one of them. |
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Unit: That portion of a complex comprised of airspace which is owned
in fee simple by the individual's) named on the deed. |
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Voting Rights: The right of the owner of a condominium unit or a
tenant-shareholder in a cooperative to vote on certain matters
concerning the affairs of the homeowners association or cooperative
corporation. |
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