The kitchen looks great. The location works. The monthly payment seems manageable.
But before you buy a condo, there’s another part of the purchase that deserves just as much attention: the association.
When you purchase a condominium, your ownership comes with shared responsibilities, financial obligations, and rules. The condition of your unit matters, but so do the building’s finances, maintenance plans, and governing documents.
Here’s what to review before moving forward.
Understand What the Monthly Assessment Covers
The monthly assessment, sometimes called HOA dues or condo fees, is part of your cost of ownership.
Before comparing two properties based on their assessments, find out what each payment includes. Ask about water, heat, insurance, exterior maintenance, snow removal, parking, amenities, and reserve contributions.
A lower assessment may leave more expenses for you to pay separately.
Build your budget around the complete picture: mortgage payment, property taxes, association assessments, your own insurance, utilities, and maintenance responsibilities. Condo assessments are usually paid separately from your mortgage payment.
Also ask whether an assessment increase has been approved or is being discussed. Your budget should have room for changes after closing.
Review the Association’s Financial Picture
Ask for the current budget, available financial statements, reserve information, and any available reserve study.
These documents help you move beyond “How much are the dues?” to more useful questions:
Is the association collecting enough to cover its operating expenses?
Is it setting money aside for major repairs?
Are there outstanding loans or significant unpaid assessments?
Are planned projects reflected in the budget?
A reserve balance needs context. The same amount of money can mean very different things for a small building with a recently replaced roof and a larger property facing several major projects.
Have your attorney help identify concerns in the documents and determine what follow-up information is needed.
Ask About Special Assessments and Upcoming Projects
A special assessment is an additional charge that may be imposed to fund an expense beyond the regular assessment.
Ask about assessments that are approved, underway, or under discussion. Also ask about upcoming work that does not yet have a funding plan.
Useful questions include:
What work is planned?
Are estimates or engineering reports available?
How will the work be funded?
What amount, if any, would be allocated to this unit?
Are there remaining installments on an existing assessment?
If an assessment affects the purchase, have your attorney address responsibility for payment in the contract. Don’t assume the seller will pay it simply because the project began before your purchase.
Request the Illinois Resale Disclosures
For a typical Illinois condominium resale by an owner other than the developer, Section 22.1 of the Illinois Condominium Property Act requires certain information to be made available to a prospective purchaser upon demand.
The required materials address matters including governing documents, unpaid charges, anticipated capital expenditures, reserves, financial information, litigation, and insurance.
These are commonly referred to as the 22.1 disclosures.
Work with your broker and attorney to request the materials promptly and track the applicable contract deadlines. If documents are missing or arrive late, ask your attorney how to proceed.
Receiving a packet is the beginning of the review. The goal is to understand what it means for your purchase.
Read the Rules Before You Commit
Make sure the association’s rules fit how you intend to use the property.
Review provisions affecting pets, rentals, smoking, renovations, flooring, moving, and use of common areas.
For example, don’t assume you can rent the unit later because another unit is currently rented. Ask about rental caps, waiting lists, minimum lease terms, and approval requirements.
If a particular use is essential to your decision, have it verified in the governing documents and any applicable amendments. A listing description or casual conversation is not enough to resolve an important restriction.
Confirm Parking, Storage, and Maintenance Responsibilities
A parking space shown during a tour may be deeded separately, assigned, rented, or available on a first-come basis. Storage arrangements can vary as well.
Have your attorney verify what rights transfer with the purchase and whether any additional charges apply.
Also clarify responsibility for items such as windows, doors, balconies, plumbing, and heating or cooling equipment. Don’t assume the association handles an item simply because it is outside your unit or serves part of the building.
Knowing where your responsibility begins helps you budget for future repairs.
Look Beyond the Unit’s Interior
Fresh paint and updated cabinets tell you little about the condition of the roof, masonry, balconies, garage, or shared mechanical systems.
During your visit, pay attention to common areas and visible maintenance concerns. Request available meeting minutes, maintenance records, and relevant inspection or engineering reports.
Ask a qualified home inspector about the scope of a condo inspection. Understand which systems and common areas will be inspected and where a specialist or additional records may be needed.
A unit inspection is valuable, but it should be considered alongside the association review.
Have Your Lender Review the Project Early
Your personal mortgage preapproval does not establish that a particular condo project qualifies for your intended financing.
Project condition, finances, insurance, and certain legal issues can affect eligibility. Fannie Mae identifies these as areas lenders evaluate when reviewing condominium properties.
Give your lender the property information early and ask what association documents are needed.
If an issue arises, find out exactly what it is, whether it can be resolved, and how it affects your loan options and timeline.
Coordinate Your Insurance Coverage
Ask your insurance agent to review the association’s master policy information and explain what coverage you need for the unit.
Discuss interior improvements, personal belongings, liability, deductibles, and potential loss-assessment coverage.
The important question is how the association’s policy and your individual policy work together. Have your agent identify gaps and explain the limits of the coverage being proposed.
Buy With a Clear Picture
A condo can be a great fit, but the purchase deserves a review that extends beyond the individual unit.
Understanding the costs, rules, maintenance obligations, and association records helps you decide whether the property supports both your current needs and your longer-term plans.
At AED Realty, we help buyers organize that process and coordinate questions with their attorney, lender, inspector, and insurance professional.
Thinking about buying a condo? Visit AEDRealty.com/buy to start building a plan for your next move.
Clarity. Strategy. Execution.
Disclaimer: This article provides general educational information and is not legal, lending, insurance, or financial advice. Association documents, contract terms, financing requirements, and individual circumstances vary. Consult your real estate attorney and other appropriate professionals for guidance specific to your purchase.