Condo Association: What to Know Before You Buy a Condo

Buying a condominium (or condo) comes with plenty of perks! You gain access to amenities you’re not personally responsible for maintaining. They’re often close to entertainment and business districts and are more affordable than entire houses. You’ll also enjoy being part of a community of residents who make up your condominium association.

Let’s explore what a condominium association is, how condo associations work, what fees or assessments you may encounter, and how condo associations differ from homeowners associations (HOAs).

What Is a Condo?

You may live in a condo right now and not even know it! While people tend to think of condos as apartments that people own, condos can take many forms, including townhouses, single-family homes, multi-family homes, and even office buildings.

If you own a condo, you own a home that’s within a development with shared amenities and common areas that you’re also partially responsible for. These common elements could include:

• Lobbies
• Swimming pools
• Parking lots
• Gardens
• Gyms
• Rooftops
• And much more

Everything else is your responsibility, from your unit’s drywall to the floorboards.

What Is a Condominium Association?

A condo association is a governing body that consists of everyone who owns a unit within the complex, building, neighborhood, or comparable development. It’s often considered a nonprofit corporation regulated by a set of governing documents, including articles of incorporation, an operating agreement, or other rules, regulations, and bylaws.

While each condo association runs a little differently, in general, they’re responsible for the following:

• Creating and enforcing your association’s rules, regulations, and bylaws
• Collecting the dues and fees for each condo owner 
• Deciding how to allocate funds to cover insurance, regular maintenance, emergencies, and other expenses

How Do Condo Associations Work?

Condo associations are usually run by a board of directors elected by the individual unit owners. These board members serve specified terms and are responsible for setting and enforcing the community association’s rules, regulations, and bylaws. They also lead regular board meetings, both for just the board and for the entire community.

Running a condo association can be quite an undertaking, especially if members don’t have a real estate background. In most cases, they don’t need it! Typically, a condo association board will have the help and guidance of a property management company. This company is there to assist the association in managing the many administrative tasks associated with their role and the rules they must enforce.

What Are the Common Rules of a Condo Association?

One of the first things you do as a condo unit owner is sign the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). This is one of your condo association’s governing documents and sets the guidelines for using the common areas and, in some instances, your individual unit. Signing this document is required, and you cannot own a condo within your community development without doing so.

Your CC&Rs will vary based on the type of development you live in. For example, a townhome may have different rules than an office building. However, many of the basic guidelines should be obvious. You cannot damage or destroy any part of the development or claim common elements as your own. You also need to ensure you’re not obstructing any sidewalks or entryways, so be mindful of where you place your trash bins, boxes, bikes, and other paraphernalia.

In addition to the obvious, here are some standard rules typically outlined in your CC&Rs.

Pet Restrictions

Some condo associations won’t allow pets or outline which types of pets (and how many) you’re allowed to have. Typically, your pets must also have their required vaccinations. Your CC&Rs might also specify whether or not your pets are allowed in certain common areas, and if they are, they may have to be on a leash.

Before you buy, ask a condo association about the rules regarding pets. Otherwise, you may have to give them up upon becoming a new homeowner.

Garbage and Recycling

Depending on your condo type, many developments will have designated trash and recycling areas. If your condo is detached, you’ll need to be mindful of what days trash and recycling pickup is so that you have your bins on the curbside on garbage day. You’ll also be responsible for bringing these bins in afterward.

Noise Regulations

Some condo associations have quiet hours, meaning that you’ll be required to keep noise to a minimum while others are sleeping. If your condo association has a noise curfew from 10 p.m. to 8 a.m., plan your parties accordingly.

Grills

Some condo associations won’t allow grilling at all, while others have restrictions on where to use one. If you’re famous for your summer barbecues, read through your CC&Rs carefully.

In-Unit Restrictions

As a homeowner, you’ll have more freedom to remodel your unit as you wish than you would as a renter. However, there are some rehabbing projects that will require the approval of your association’s board of directors. 

For example, if you’re considering creating an open floor plan, your board must be notified to ensure you’re not knocking down any load-bearing walls. If you do, you can cause immeasurable damage to the structural integrity of your unit — and the entire building.

Common Condo Association Fees and Assessments

Condo associations are in charge of collecting dues and fees from each condo owner. These fees vary, as do how often they’re collected. Your regular fees cover your operating fund and pad your reserves. In some cases, you may also be charged with a special assessment. Let’s break down each of these categories.

Operating Fund

Your condo association’s operating fund covers general expenses, including:

• Landscaping and gardening
• Window washing
• Elevator repair
• Garbage cleanup
• Carpeting
• Utilities
• Anything else associated with common areas and your condo’s exterior

Your operating fund also includes condo association insurance in case of vandalism, a fire, natural disasters, etc.

Reserves

Your reserve fund acts as your condo association’s savings account and is used for emergencies and required upgrades. For instance, if you know you need a roof repair, your association board should budget for that in advance. Your reserves are also there to cover things that your condo association insurance might not, such as flooding from a burst pipe.

Your operating and reserve budgets are typically decided annually at a meeting open to all condo unit owners.

Special Assessments

The term “special assessment” can make any condo owner shudder. These are one-time fees required when something needs urgent repair, and it exceeds your association’s operating and reserve budgets. 

For example, if your roof isn’t up to code and repairs aren’t in the budget, your condo association must vote to approve a special assessment.

Assessments can be pretty steep depending on the need, so your association might have to work out a payment plan for some or all unit owners.

Assessments aren’t ideal, but if it’s any consolation, at least you’re splitting the cost among the rest of your association’s community instead of paying it all yourself.

What’s the Difference Between a Condo Association and an HOA?

Condo associations and HOAs are sometimes used interchangeably. Both have a board of directors and regular meetings. They also have common fee structures and responsibilities. However, there is a key difference between the two:

• In a condo association, homeowners own a portion of the common areas. The condo association doesn’t actually own anything. It simply acts as a governing body.
• In an HOA, the association owns the common areas and is thus responsible for them. The HOA serves as an independent entity or is owned by an HOA management company or a developer.

Beyond that, condo associations and HOAs are just about identical.

Navigate Your Condo Association Rules With Aalto

Homeownership can be stressful, especially when additional paperwork like CC&Rs is involved. But it can be more rewarding and less burdensome when you have support.

Enter Aalto, a self-service homebuying and selling platform. Our team of experts helps you throughout your entire homebuying process, which includes handling all the legal paperwork to make your experience less stressful. 

Aalto’s market experts are there to help every step of the way, and buyers will get up to 1.5% cash back on any home, which can be used to help with closing costs or to strengthen their offer.

We’re dedicated to shifting the balance of power in residential real estate away from industry leaders and toward people like you to make your journey to homeownership an easier, more enjoyable experience.

Are you ready to become a condo owner? Sign up with Aalto today!