UT Reader Asks: What Should I Expect From a Condo Association of Two?

• May 30, 2012
• 11 Comments

by Shilpi Paul

The kitchen of the condo in question.

In this installment of UrbanTurf Reader Asks, a potential buyer is tempted by a seemingly perfect condo, but has reservations about joining an extremely small homeowner's association.

"My husband and I were UrbanTurf readers when we lived in DC, but now live in San Francisco and are thinking of making on offer on a two-bedroom condo in a house that contains two units. The location is perfect for us, and it has everything we want, like a giant laundry room that could be turned into a second bathroom easily. It's well-maintained and cute.

So, here's the big reservation: it's a two-unit building, so we'll be joining a very small homeowner's association. We haven't met the other owner yet, but it seems like it could be a complicated relationship to have with a random stranger. We want to meet and learn more about her, but won't be able to until after we are under contract. We can look and see if the property has ample reserves, but beyond that, it is hard to know how large repairs, etc. are handled. Will we have trouble creating that second bathroom?

Have any UrbanTurf readers been in this situation? If so, we would love to hear about your experiences, positive or negative."

Post your thoughts and experiences in the comments below. If you would like to submit a question for UrbanTurf Reader Asks, send an email to .(JavaScript must be enabled to view this email address).

Similar Posts:

* The Pros of Joining Your Condo or Co-op Board * The Cons of Condo Board Membership * UT Reader Asks: New Condo Versus Old

This article originally published at http://dc.urbanturf.com/articles/blog/urbanturf_reader_asks_what_should_i_expect_from_a_condo_association_of_two/5596

11 Comments

1. Janson said at 7:25 pm on Wednesday May 30, 2012:
   I'm on my small condo board. We haven't had much trouble coming to consensus. But we also have extensive and clear condo docs that detail things like common elements and approval processes. In terms of things to look for, don't just look at the condo balance, look at the history of both balances, fees, and special assessments. Also look at the current and any past engineering and reserve account studies. See if the association stuck with it in the past. Finally, just ask the other owner what concerns they have about your bathroom renovation and other issues. things like noise and trash are more likely to shape your experience than projects, in my opinion.

1. Eric said at 7:30 pm on Wednesday May 30, 2012:
   I tackled this same question when buying into a 4-unit row house. I think your situation (two units) puts you into a more precarious financial situation than me, particularly if a big improvement is needed and the building has low reserves and/or the other owner is just not willing to pay. But I think because the current owner has lived there for some time, you don't have to worry about the latter. If you can't have a conversation with the current owner before moving in, I would try and see if the bank can tell you if she has been paying her dues on time and find out what the building reserves are. Also, see if you can find out when big-time repairs (roof replacement, HVAC, boiler, etc.) were last done.

1. Greylin Thomas said at 8:10 pm on Wednesday May 30, 2012:
   As a realtor and a board president of a small HOA of 7 townhomes it can be tricky and hard to enforce rules and not be seen as the guy that "thinks he owns the place" I just try to get along with everyone and listen to what everyone says. I would be hesitant about buying something that when it comes down to a vote on an issue there is no one to break the tie unless the price was right!!!

1. jag said at 8:15 pm on Wednesday May 30, 2012:
   See what the condo docs say. If they clearly spell out the voting/approval process and what common elements are the responsibility of the Association then sure, go for it (but understand the financial risk and the work that goes into running a small HOA). If the docs are vague...you're just asking for trouble.

1. Dana Hollish Hill said at 8:36 pm on Wednesday May 30, 2012:
   San Francisco has a different real estate culture than we have here. In SF, many couples pair up to buy a single home together as tenants in common and then divide the home into two separate condos. That practice isn't really popular here. What if the other tenant goes into foreclosure? Can you cover her portion of the condo fees for taxes, insurance, utilities? If you were in a building, the burden would be shared by many. Also, what if the other tenant rents out her unit and you decide to sell yours. FHA guidelines will see that you have a 50% owner occupancy building and will not approve loans to people who want to use FHA financing. Do you foresee this building attracting people who already have 20% down or are they more likely to have 3.5% down as required in FHA financing. That could really affect your resale. Make sure the bylaws include rules about renting out the units. The condo rules regarding renovations, improvements, etc. should be spelled out in the by laws. Vague rules mean that no one has wanted to face these issues yet. Finally, try and find out why the sellers are leaving. It may give you some insight into what your experience in that building will be like.

1. Jim Morrison said at 9:24 pm on Wednesday May 30, 2012:
   A two unit condo has all the potential for a good horror movie. Neither owner holds a majority control (unless one unit is larger than the other, in which case that unit is always in majority control). What happens if your other condo owner fails to fund condo fees? What if there is a need for a major repair to the common elements affecting you, but not the other owner, who isn't sympathetic (like a bad roof leak)? What if the other owner consistently breaks the condo rules regarding your parking space, noise, trash, etc? What if you don't want to be bothered by the governance structure of your condo and serving on its board, but neither does the other condo owner? In each situation, you're in a fight. If you're willing to live in a condo, make sure there are enough units to pay efficiently for professional management, and to engender a community spirit that common sense will prevail when it comes to rule enforcement and adequate reserves.

1. brando said at 3:25 am on Thursday May 31, 2012:
   Great question! Thanks for posting - and for the responses.

1. biggie said at 3:49 am on Thursday May 31, 2012:
   Only buy it if you are ready to buy the other unit if you need to.

1. boyan dimitrov said at 3:55 pm on Thursday May 31, 2012:
   Perhaps it's possible to put some conditions in the contract which allow the buyer to back out, in case any of several pre-specified circumstances were to be true.

1. ToddJ said at 6:10 pm on Thursday May 31, 2012:
   I'm in exactly this situation: a two unit condo building, no condo docs whatsoever and no fees. Basically we've got a gentleman's agreement to cover common issues jointly (even though I have two floors versus the English Basement other condo unit). Generally its worked out fine -- the other owner had a water leak issue thanks to a drainage problem next door that we handled jointly. The biggest issue has been I'm more of a "decide and do" person and she's more of a "deliberative, many many quotes, and research" person. Ultimately its not been a bad thing, even if it frustrates me. By my not being difficult on issues such as her foundation leaks (which to be fair ARE a joint property issue), she's been fine about things like sealing/treating decking that she really doesn't use. We did have a bit of an issue with her preference to put tomato plants in the front garden bed and my not liking coming home to Green Acres, but that all said and done was a minor issue. Where we've had some friction is my desire to get blow in soundproofing put in between our units (because we can hear everything). She's not convinced it'll be effective for the cost (which is fair) and will be disruptive to her tenants (she's since moved out and rents her unit). I'm still pushing for it, but I've relented on the timeline, if not the need. I've also not had any issues with refinancing my unit because hers is rented. That may be because I have a great broker, but no problems and have gone through major banks.

1. ToddJ said at 6:13 pm on Thursday May 31, 2012:
   One thing to add on the "buy the other unit" comment. I looked into that in my 2 unit condo case. I was advised against it by both a realtor and my mortgage broker. It'll depend on your market of course, but in my area of DC the developer got more bang for their buck by doing a multi unit property. Basically my building is (a) worth more as two units than one (b) almost no mortgage firm would finance it as anything other than as an investment property and even then most balked because they didn't like one owner holding the whole building, even if the units were to be combined and (c) I was told if I did do it, I wouldn't recoup the cost for decades.