The collapse of the Champlain Towers South condominium in Surfside Florida shows how important it is for buyers to not only verify the financial soundness of a future condo association, but the soundness of the building as well.
Buyers may consider waiving inspections and review of association documents in order to make their offer more attractive, but they reveal crucial information. Otherwise, you could end up with issues you could have avoided.
An article in the July 16, 2021 Wall Street Journal suggests these four tasks:
- Review several years worth of condo or co-op board minutes.
- Look at the financial statements to be sure enough has been set aside for repairs
- Google any media reports of problems with the building
- Review the association’s insurance. The bylaws will tell you what you have to cover, but you should be sure the association’s policy limits are sufficient for rebuilding.
As with any purchase, be sure you have sufficient liability coverage and alternate living coverage if you have to leave your home. Even total loss doesn’t relieve a unit owner of the obligation to make mortgage payments.
