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Condominium Living: Is It Right for You? 

For some people, a condominium lifestyle is the only way to live – no lawn maintenance, availability of a pool and health club, and extra security features you might not have in a single-family home. Other people simply are not comfortable with the restrictions imposed by the condominium lifestyle. Here are a few thing you need know about condominiums:

 What is a condominium?

A condominium is not the same as an apartment, although condominiums may include apartment-style complexes, townhouses or converted multi-family dwellings. Condominiums are different from other multi-tenant buildings in that the developer has legally declared it to be a condominium and homes in the building are purchased rather than rented. In most states, this means that the development falls under specially designated laws and regulations applied to condominiums.

 Who might consider living in a condominium?

People who want to make the switch from renting to owning often choose a condominium as their first “real home.” Other buyers purchase a condominium as a part-time holiday retreat or are attracted by a lifestyle that has fewer responsibilities.

 What does the purchase a condominium include?

When purchasing a condominium, the owner buys the title to his or her individual home, up to the perimeter of the unit. Common areas of the building, such as stairwells, outer walls, fitness centers and grounds, are under shared ownership. Each home owner holds an interest in these spaces. In order to manage the maintenance and repair of the shared common areas, every condominium has a condominium association. The association is elected by condominium owners and makes communal decisions in the interest of the community.

 What are maintenance fees?

Like an individual home, buying a condominium involves a down payment, a monthly mortgage and a property tax. In addition, each condominium owner pays a maintenance fee to provide for the upkeep of the building and to pay the salaries of groundskeepers, concierges, handymen, and security personnel. The condominium association budgets and determines the condominium fees for all units. Condominium fees are typically determined by the size of your unit and the projected expenses for building maintenance and repair. Condominium fees are paid monthly and may change in response to inflation or rising energy costs. In addition, owners may pay special assessment fees. These fees may be requested when an unexpected repair exceeds the amount of the condominium fees collected.

 What is a Reserve Fund?

 A reserve fund provides for the replenishment of "big ticket" items  for the building, for example replacing roofs, carpeting, and driveways as needed. A fully-funded reserve account ensures the stability of the lifestyle of the residents of the condominium.

Summary of pros and cons of the condominium lifestyle:

 Pros

Location: If you want to be in the center of the action in a city, a condominium may be a good choice. With land at a premium, downtown locations have a wide variety of condominium choices, from swanky high-rises to renovated warehouses.

Security: Condominium buildings often have security features such as a guard service, TV security monitors, and enclosed parking. And having lots of neighbors close-by can provide peace of mind and built-in house sitters if you leave for an extended period of time. This is particularly helpful if this is your second home, and you are only there for part of the year.

Low maintenance: Someone else does the landscaping and takes care of overall structural maintenance. However, if you cause damage to a neighbor's residence, you will have to pay for the repairs.

Affordability: While condominiums have a wide price range, the lower range is often within the budget of first-time buyers and singles who may find single-family houses unaffordable.

Amenities: Most condominium developments offer a range of amenities in the common areas, such as a swimming pool and health club.

Condominium association: Every home owner is a member of the condominium association, which also has an elected board. The association serves to enforce bylaws, handles maintenance and repair issues, and deals with disputes between home owners.

Cons

Space: You do not own the land beneath the building, but simply share an interest in it. Instead, you own the space between the walls of your unit and share ownership of the common areas with other owners.

Community living: Shared walls and common areas mean that you are more likely to hear your neighbors or run into them more often. Also, as part of the homeowner’s association, you will have to coordinate with neighbors to come to decisions regarding the common areas.

Fees: Monthly condominium fees go toward maintenance and repair of the common areas. There are occasionally additional assessment fees to handle larger repair jobs. Your fees may also be paying for amenities, such as a swimming pool, that you may not use.

Rules: Condominiums are governed by a set of rules. This can include restrictions on noise levels, pet ownership, and renovations. A part of condominium living is managing the business of the condominium. Although mostly dealt with by a board with minimum involvement of the owners, the Board may make decisions that affect the owners' lifestyle or pocketbook.

For a more complete guide to condominiums, see:  realestate.com.