Daily Real Estate News  |  April 20, 2007  |   Read the Fine Print Before Buying a Condo
Buying a condominium without studying the building’s finances can land a buyer in trouble.

Here are some important factors for your condo buyers to review — or to have reviewed by an attorney, says Steven R. Wagner, a real estate lawyer at Wagner Davis in New York City.

• Examine current assets and liabilities to see if there’s enough money to pay current expenses.

• Examine the reserves to see if there’s sufficient money so maintenance and regular expenses won’t be drastically affected if an emergency arises.

• Ask to compare at least two years worth of financial statements to make sure spending is consistent, a hallmark of good management.

• Find out if the building is regularly spending money on repairs and upgrades. Letting this kind of maintenance pile up can foreshadow big bills later on.

• Read a year’s worth of condo board meeting minutes for any suggestion of contingent liabilities, which suggests there may be a lawsuit in the wings. While lawsuits usually are covered by insurance, you’ll want to know whether it’s a litigious board.

Source: The New York Times News Service, Teri Karush Rogers (04/20/07)