Buy condo.... or walk away?

[freeat57]

Hello everyone!  I need some advice.  I have bought and sold two single family homes in my life, but never a condo.  I have read extensively on the subject, but am still skittish due to the horror stories out there.  I want a condo for convenience, so that I can "lock and leave" for extended periods.

The condo I have an offer on is in a very desirable location for me and in a building that I like in a hot market.  The unit itself has a couple of issues, but I can deal with those.  Here's the problem.  My offer was accepted on Tuesday evening and became "binding" Wednesday Oct 12.  (There were 3 other offers, I was told).  I am now in the 7 day due diligence period when I can get my earnest money back for any reason.  I have repeatedly asked for the association meeting minutes and financial statements to no avail.  All I get is "we are working on getting those".  I have the rules/bylaws, but those are pretty standard stuff.  My alarm increased when I got the "Community Disclosure Form" which had a box checked that said a special assessment of undetermined amount had been discussed by the board, but no action taken and no plan in place.  I shot off a message to my realtor and the seller's asking for immediate clarification and demanding the financial documents and meeting minutes.  I still do not have those!!  Here's what I did get:

"I just spoke with listing agent.  The seller is on the board.  There was a small discussion amongst the board regarding doing some exterior work.  Nothing has been brought up further than that discussion.  He is afraid he will get in trouble for even mentioning it, but didn't want to lie.  "

I only have until Tuesday  to walk away and get my earnest money back.  The unit inspection is scheduled for Monday 9:00AM.  I did not personally see any big problems with the building.  It was built in 2006. 

What would you do?

[freeat57]

Thanks Ilhamo.  I was thinking very much the same, but since I am new to the condo market, was not sure if this goes on all the time.  I would think that a seller, who is on the board would already be in possession of those documents.

[freeat57]

--- We live in a condo currently--and love the lock and leave---- our condo fee is $215 a month- it's well worth it...covers everything outside including roof replacement, landscaping, snow removal, etc...   well managed- our board president is a retired police, no big items to break (elevators, pool, etc) --  I've been to a meeting or two, but don't want to get involved because it's currently run well and I'm now friends with our treasurer, who keeps a tight grip on the purse strings...
[/quote]

Thanks inverse!  It is encouraging to hear from someone having a good experience in a condo.  Late last night, I received an email forwarded to me from the seller. It was addresses t his realtor.

 

"I apologize for not responding earlier, but I am working with a client in Boston and we have a few critical deadlines.  In response to the Special Assessment questions, Section J, of the revised “Community Association Disclosure” for Mxxxx Drive, Loft 109,  I am submitting the following supportive clarification.

I submitted the answer “amount TBD -  has not been presented to owners”  because a Special Assessment was discussed by the Board to improve the exterior envelope of the building.   An engineering firm is currently conducting an evaluation to recommend enhancements and improvements.  Since the evaluation has not been completed, a final recommendation from the Board has not been presented to the owners for voting.  I hope this correspondence clarifies my position and desire to be transparent."

 I edited out the exact address.  This is in Atlanta.  I still do not have the financials or minutes.

[freeat57]

Thanks again folks!  This is a four story stressed concrete, masonry building with a flat roof.  I just got some financials and minutes.  I have a lot of reading and calculating to do.

[freeat57]

"Improve the exterior envelope" is code for "the building is leaking and needs to be fixed immediately."

Thanks again for the translation!  I think you are exactly right.  This building has some penthouse units which are two story and have roof top decks.  I saw mention in the minutes of some leaking associated with those roof decks. 

Here's what I did:  If you google "cost to roof a commercial building", you will find sites with nifty calculators.  I also found an article discussing the cost to roof buildings at a large university.  I chose two calculators (one zip code based), using highest quality materials and manually calculated a third estimate based on the high end $/sq ft range given in the article.  I estimated roof sq ft by two different methods and took higher number.  The result is that one calculator and the manually calculated amount were nearly identical, ~$330K.  the other calculator (zip code based one) came in low at $170K. 

Taking the $330K number and dividing by 64 units yields a number I could easily live with for an assessment.

Flaws in my thinking?

Taking the high number and dividing by

[freeat57]

The problem with large assessments is they typically require a vote of the entire ownership, and if you have a large number of people in the building who are living on the financial edge (including people living on a fixed income) then they might not approve the necessary work.

Ah yes!  The (mis)behavior of the masses.  Sad but interesting story.  Thanks for all your advice.  It gives me a lot to think about.