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Tips for Condo Owners Starting An Association

Ask the Real Estate Lawyer: Real Estate Law Q&A

REM #LAW 693

By Ilyce R. Glink and Samuel J. Tamkin

Summary: A reader lives in a condominium that the developer is turning over to a condo assoication. Ilyce and Sam suggest getting a copy of the condominium statute from the state and warns the owner to be cautious when hiring a management company.

Q: The developers are turning over our association to the unit owners.
(article continues below useful links)

Do you have suggested reading materials for me on how to do this? If we hire a management company, shouldn't they do everything for us?

A: I would suggest that you obtain a copy of that portion of the condominium statute in your state that relates to the turnover of a condominium to its new owners. Most states have a specific provision relating to what needs to be delivered by the developer to the newly formed association.

While statutes are written with lots of legal terms, you still might find it worthwhile reading. For example, the Illinois statute would tell you how the developer must run the association prior to handing it over to the new owners, how and when the first board must be elected once the association has been turned over, what documents must be given to the association when it is turned over and how the developer must account for association funds.

You can generally get most of this information from your state’s web site listed under legislation and laws. You can even do an online search using one of the big search engines. Enter the name of your state and the words “condominium law” to start your search for information.

Your second question relates to management companies and they services they provide.

Management companies offer different levels of services for different fees. The most basic management services include helping the association bill each unit owner for monthly assessments, receiving funds and doing basic bookkeeping services.

For additional fees, they’ll add on supervisory and other services. The thing is, it’s easy to overpay for what you’re getting. So if your building hires a management company, you’ll need to determine what services they will perform for the fee they will be paid.

If you’re looking for a management company to handle all of the affairs of the association, including attending monthly board meetings and hiring employees for the association, it won’t be cheap.

Generally, small associations do not hire management companies and do it all themselves. In other cases, they will only hire the management company to handle the billing of the monthly assessments and the payment of basic bills. But the association has to do the legwork when it comes to finding contractors to do repairs, hiring attorneys and other employees, and even dealing with neighbor issues.

And that can be expensive.

Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your Home Faster and For More Money In Any Market. If you have questions for them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyce’s website www.thinkglink.com

 

 

 

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