Buying a Condominium

Some important things to know about condominium ownership......

There are several benefits and several liabilities with condominium ownership.


•  No outside maintenance concerns.

•  Security in having a number of neighbors close by.

•  Added facility benefits may include recreational areas, pool, meeting rooms, etc.

•  Usually a newer and well maintained home.

•  Generally less expensive than a single family home Liabilities:

•  Most decisions are made by the majority of owners and may not be your personal choice.

•  Lack of privacy

•  No personal yard

•  Condo fee is part of your maximum allowable monthly payment

•  Pets may not be allowed


Condominium is not a style of home, it is a way one owns property.   When you purchase a property as a condominium form of ownership, you own 100% of all that is within the walls of your home and a percentage of all the public areas including: the roof, the building siding, sidewalks, and public facilities.   This may include a pool, playground and/or tennis courts, etc...

Since a condominium is a type of ownership, there are many different kinds.  


For example:

•  A one floor apartment in an apartment building.

•  A   two or three story “townhouse” attached to other, similar units.

•  One of a number of cottages that are physically separate from one another.

•  A retail office space within a larger commercial building.


Prior to signing the Purchase and Sales Document, the buyer should ask for the following Records:


1 .   A recorded set of Condominium Documents and any Rules and Regulations and certificates filed in accordance with M.G.L. c. 183A.   This is to make sure that the purchaser may use the condominium for the purposes for which he or she intends.

2.   Financial Records .   This includes Budgets for the last three years and any

increases, financial statements for the last three years association. and audits, reviews, etc, for the last three years.   This information should be reviewed to assess the financial stability of the association.

3.   Facilities, condition Reports and Reserve.   Not just for individual unit, but the overall structure and physical health of the entire Association should be reviewed.   In other words, in purchasing a Condominium, not only does one buy the unit, but additionally become an owner of an undivided   interest in the common areas.   A reserve report not only focuses on the current status of the construction of items, but also on the amount allocated for future repairs.

4.   Litigation issues such as outstanding cases against the Board of Trustees, Cases against the former developer, Rule enforcement issues and collation actions.

5.   Insurance .   The condominium insurance policy essentially acts as the initial homeowner’s policy for the unit owner.   However, unlike traditional insurance, there are issues of coverage and deductibles which catch most unit owners by surprise.

6.   Minutes   One of the best sources of information regarding the Condominium is the minutes maintained by both the board of Trustees for board meetings and the unit owner meetings.   This information will provide a brief history of the association as well as the type of problems associated with the association.

7.   There are four other individuals who may provide information to the intended purchaser, although permission must be obtained to speak with   these individuals. They are, the property manager, counsel to the association, insurance agent and CPA.   All may provide important background information.

A Few items to keep in mind:

•  A buyer looking to receive an FHA insured mortgage needs to find out if the condominium complex is FHA approved or, on rare occasion, the home can be “spot approved”.

•  A buyer should be aware that the lending institution takes the monthly association fee into account as an expense for the buyer when calculating how much the buyer can afford.

•  Reviewing all these documents prior to signing the Purchase and Sales   is ideal but   improbable in reality.   The buyer should insist on and include the request in the offer to purchase the following:

              Master Deed

              Rules and Regulations

              Financial Statement

              Master Insurance Policy

Terms to know:

Master Deed

  A Condominium is created by recording what is known as a Master Deed at the County Registry of Deeds where the real estate is located.

Unit Deed

In addition to the Master Deed which is filed to establish the total condominium, each unit (apartment or office) must have a Unit Deed to convey each separate condominium from one owner to the next.

Common Areas

The unit owner receives title to the individual unit he/she has purchased plus an interest in the Common Areas along with other unit owners.


The unit owners association managing and regulating the condominium must have bylaws in accordance with Massachusetts General Law c183A that includes the method of providing for necessary repairs, collecting fees, procedure for hiring personnel, method for changing and adopting rules governing the details or operation, and any restriction or requirements regarding the use of the units and common areas that are not set forth in the deed.

Condominium Fee

Each owner has a percentage interest in all common areas that is set forth in the Master Deed.   The percentage interest is the relationship of the unit to the total of all units.   The law states that this shall be the relationship of unit fair market value to the total of all unit fair market values.  

Condominium Association

The unit owners’ management association

6(d) Certificate

Any outstanding condominium fees must be paid to the condominium association prior to selling a unit or such outstanding fees will form a lien on the property.    To insure that such outstanding fees are paid, Massachusetts General Law c. 183 A Section 6(d) requires a statement of the organization of unit owners setting forth the amount of unpaid common expense assessed to the unit owner.

Rules and Regulations

Rules and Regulations is a Document that controls some of the activities of unit owners and their guests.   Some of the common items affected might include parking regulations, fines , use of “for Sale” signs, use of decks or common areas, and permission for pets.

Operating Reserve

Many condominium developers or associations establish Operating Reserve accounts when a condominium project begins.   A typical amount is two to three months condo fee so that unforeseen repairs can be made.   Many, if not most associations eliminated this separate operating account and transferred the balance into their normal association operating account after the condo project was fully sold out and the association had been in control for a period of time.

Capital Reserves

Many condo associations decided that funding capital improvements, such as resurfacing the parking lot or redecorating the lobby, should not com out of the normal operating account or by means of special assessment.   That would make the current owner responsible for the total cost, even if they just purchased the unit.   Therefore a separate Capital Reserve account is established.