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Beware of Condominium Association Covenants

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Condominium owners are legally bound to the covenants, conditions, and restrictions (CC and Rs) established by the condominium's association of owners. Condo association covenants make sense most of the time, and you'll be happy that they exist when your neighbors misbehave — but it's also possible that you may find yourself restricted in annoying ways.

Most likely, the CC and R is already established when you buy a condo, so trying to change any part of it can be challenging. As a condo owner you own your apartment, while everything outside your door — the common areas that you and neighbors use, such as hallways, stairs, sidewalks, and so on — are owned by the condo association. Each condo owner is a member of this association, which meets regularly to discuss owner concerns, talk about the CC and Rs, and vote on expenditures and other issues. Usually, each condo unit has one vote; so if you own four units, you get four votes.

The following are some of the common binds that condo owners sometimes find themselves in.

Rising costs

As a condo owner, you are going to be assessed a share of all the costs of running the building, which includes real estate taxes, payroll (to the superintendent, door attendants, and so on), insurance, and assessments. The assessment costs may go up because a majority of tenants decide to make improvements, such as redoing the lobby, or because the locality passes a law that mandates changes, such as the placement of hurricane shades in all windows.

The builders of some condos take care of the maintenance at the outset, so that monthly fees remain low and apartments sell. At some point they pull out and the association must bear all the costs and those fees soar, so beware of deals that are too good to be true.

Use restrictions

If the association says you can't have a dog or children, then even though it's your home, you have to abide by their rules. Some of these restrictions involve merely personal choices, including what color paints and window dressings are permitted — but when it comes to the rules about renting, your financial health could be at risk. Let's say your job forces you to move at a time when the real estate market is down; so rather than take a loss on your apartment, you'd like to rent it out until the market improves. If renting is against the rules, you may be out of luck.

If you plan on renting an apartment in a condo, make sure that the owner can legally rent it to you or else you may find yourself out on the street once the association discovers what is going on.

Condos aren't necessarily apartments

Some communities where everyone lives in a separate dwelling (like a townhouse or stand-alone home) yet share common areas are considered condos. For example, so-called "gated communities" are usually condos because all the residents share in the upkeep of having guards at the gates. While the CC and Rs are designed to uphold property values by keeping the community well maintained, you may think that the stand-alone home you're buying is your castle only to find out that you can't park your RV or boat in the driveway, display the flag on a pole, or put up a basketball hoop over the garage. The obvious answer is to read the CC and Rs carefully before buying.

Making changes, taking action

If you feel strongly about changing certain items of the CC and Rs, you can start a campaign among the residents to make changes. Getting yourself elected to the board of directors might also help you to make your case. But in general, condo owners don't look favorably on rocking the boat, so you're probably better off putting up with them — or moving.

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