Advice for seniors eyeing a condo purchase
Q. My husband and I have just turned 65 and are planning to downsize as we enter our retirement years. We are considering purchasing a condominium for our next home. Not being familiar with the Condominium Property Act and not having previous condominium association experience, what would you suggest being our best steps with investigating a condominium or townhouse ownership? What are the big things you suggest we become aware of or make sure we ask before purchasing?
A. Congratulations. One of the important things to know is that you will be giving up some real estate property “freedoms” when moving into a condominium, or any property administered by a homeowner’s association. So, look at the association’s declaration and rules to see if the restrictions match your expectations and lifestyle. For example, if you have a dog, you want to make sure it is permitted.
An important issue to investigate is the financial health of the association. People in their retirement years are typically living on less income than in their working years and don’t want too many financial surprises. So, you will want to investigate if the reserve fund is reasonably funded, and if there are any anticipated capital expenditures and as to how they will be funded. Check if there are any large assessment increases or special assessments looming.
Some of this information can be gleaned by reviewing minutes of the association for the past year or so, or in the disclosures required to be provided to prospective purchasers upon request. The minutes should also give you a sense of the issues facing the association. Hopefully, no big surprises.
Look into the amenities of the association. A swimming pool and tennis court could save you the expense of a health club, but may increase your expenses if you would not use them. Look at the demographic of the association. While many retirees don’t want to be in a building of elderly owners, many don’t want to be in an association of all 20-somethings either.
Finally, find a local real estate agent that is familiar with the properties in the area. They should have some good insight on well-managed properties and the “reputation” of the associations you are considering.
Q. The board of our condominium association meets from time to time with the association’s attorney. Does this meeting have to take place in a portion of our board meeting open to all unit owners?
A. In general, meetings of the board of directors must be open to any unit owner. The Condominium Property Act, however, provides several exceptions to this general rule including consultations with the association’s attorney. Under the Act, the board can meet in “closed session” to: (i) discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) discuss the appointment, employment, engagement or dismissal of an employee, independent contractor, agent, or other provider of goods and services, (iii) interview a potential employee, independent contractor, agent, or other provider of goods and services, (iv) discuss violations of rules and regulations of the association, (v) discuss a unit owner’s unpaid share of common expenses or (vi) consult with the association’s legal counsel.
These exceptions only apply to board discussions regarding these issues or legal consultations. Any formal board vote on these matters must take place at a meeting of the board or portion thereof open to any unit owners.
• Matthew Moodhe is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. Send questions for the column to him at condotalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.