Communal Property (Condos and Co-Ops)
Purchasing a condominium or other communal property is more than just an investment in a dwelling unit, it is also the purchase of an interest in community property. It is important to know what you're getting in both respects - that is, what is the physical condition of your prospective dwelling unit and the physical and financial condition of the communal (common) property.
To help gather some of the information needed to make an informed purchase decision, a home inspection can provide insight into the condition of the major elements of your individual unit. However, a home inspection is not, nor is it intended to be, an evaluation of any community or common property. Maintenance of the common property is typically the responsibility of a condominium or owners association, or in the case of a cooperative, the cooperative corporation. In either case, day-to-day operations are usually overseen by a board of directors and handled by a manager or management firm.
Accordingly, the owners association and management should be contacted to obtain pertinent information on property conditions. Specifically, the master deed, bylaws, and the operating budget, including the reserve schedule which identifies future replacement needs and associated costs, should be reviewed. Engineering reports or other property evaluations on the condition of the property should also be reviewed. Additionally, information should be obtained from the association regarding any known construction defects, prior storm damage, the extent of planned repairs, and any pending claims or lawsuits.
Any comments made in a home inspection report relative to the common areas or property would be limited in nature and provided for general information purposes only. Questionable issues should be investigated and resolved to your satisfaction prior to completing any purchase. Since individual unit owners have an interest in the common property, they are ultimately responsible for the cost of maintenance, not only for elements directly adjacent to the subject unit, but also for common elements in other areas of the complex. Monies paid over the years into a replacement fund may cover these costs; but if the money isn't available when repair or replacement work is needed, a special assessment may be required of all owners.
Several latent construction defects and related issues affecting elements that are often found in communal properties have surfaced over the years. One issue involves the failure of fire-retardant treated (FRT) roof sheathing, a specially treated plywood product used to improve the fire-resistive nature of the roof structure. Many community property developments have been confronted with the premature failure of wood-composites, hardboard siding, and Exterior Insulation Finish Systems wall-cladding products. These type problems can lead to litigation and ultimately involve special assessments.
Determination of the parameters of ownership associated with an individual dwelling unit or community property is beyond the scope of a standard home inspection. Consequently, the items included or excluded in a home inspection report are based on the typical situation. That is, the elements or systems outside the interior boundaries of an individual dwelling unit are generally not the direct responsibility of the individual unit owner. If, after review of the appropriate documents, it is determined that you did not request inspection of an element you are directly responsible for, arrangement should be made to have it inspected prior to closing.
Windows are one area of a unit that, while part of the exterior envelope, may be the responsibility of an individual unit owner. Many dwellings have insulated windows and sliders. This type window unit is subject to failure of its airtight seal, which can eventually lead, to the buildup of moisture and staining between the panes of glass. This condition may not be readily visible during a limited inspection. Initially check for any evidence prior to closing and be prepared for possible replacement needs should failure be detected at a later date. Decks can also be a questionable area in terms of ownership and maintenance. In most cases, if the deck is part of the original construction, the association will be responsible. Where owners are allowed to add their own deck or other appurtenances, they likely are responsible for all repair and maintenance.
Due to the typical design features of communal properties, special consideration must be given to noise or sound transmission issues during construction. Various methods can be implemented to help minimize sound transmission; however, the evaluation of such features is not part of a home inspection.
For your family's personal safety, it is important to confirm that communal security and fire alarm systems are regularly maintained and comply with local requirements. Consideration must also be given to the security and safety issues for your unit. Do not overlook the need to have approved and functional smoke detectors and carbon monoxide detectors in place at all times.
It is also important to determine the location for all the utility disconnects serving your unit in the event they must be used in an emergency or for servicing of equipment. While a main service disconnect should be provided for the electric distribution panel in each unit, these disconnects may be located at a remote location and are typically locked for security purposes.
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