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What To Know Before Buying In A Condominium Or Planned Community

There are many reasons people buy a home in a condominium or community association. Some great reasons include the availability and shared expense of recreational amenities, architectural style, affordability and social gatherings. However, learning all of the details of a community before purchasing is extremely important. The condominium or community association may impose restrictions and require the payment of periodic assessments, and you’ll want to be aware of these.
 
It's appropriate to ask whether there is an owners association soon after you identify a home you’d like to purchase. The seller is obligated to produce the governing documents, including the declaration of protective covenants, conditions and restrictions (CC&Rs), bylaws and anything else that applies. For everyone’s convenience, at CAMS we place the governing documents on each association’s website, which is accessible to the public. But not every association is as transparent or easy to access as the ones we advise.
 
Buyers need to be aware of the obligations they are agreeing to when purchasing in a condominium or community association. Membership is automatic, not voluntary, when a buyer receives a deed to the property. Members are obligated to pay assessments, obey the association’s governing documents including rules and regulations, and comply with the architectural guidelines.
 
All of this requires that you understand your personal preferences before you decide to live under an association. For example, are you OK with neighbors approving or rejecting your home plans? Will you be comfortable abiding by the governing documents and policies developed by the association and its board of directors? Or do you want to always be in control? Will you regret your decision when you must comply with a rule you don’t like? While an association can provide a lot of shelter, opportunity and conflict management, you must know your feelings about these types of questions before you commit.
 
Learn all of the facts about an association before purchasing a home in a condominium or community.
 
Some other things to consider include:

  1. Know the amount of assessments, how often they are collected and what services they cover.
     
  2. Can you rent? Some associations’ CC&Rs prohibit leasing your property or include a minimum rental period of a year, six months or even less. If you do decide to rent out your property, know that it is your responsibility as the owner to educate your renters and ensure they abide by the association rules. We recommended that a copy of the association’s governing documents, including all rules and regulations, are made part of the lease. In North Carolina, the owners may be required to attend hearings in the event the renters receive a violation notice. The owner is ultimately responsible for the conduct of their renters and may be held responsible for any fines that may be levied. Any fines imposed as a result of the violation and hearing will be placed on the owner’s account.
     
  3. It is helpful to review the association’s financial reports to obtain an accurate picture of its financial status. Ask how the annual reserve allocation is determined – was a reserve study performed? If so, how long ago? Are funds being placed in reserves according to the schedule found in the reserve study? Obtain a copy of the current budget that outlines the services provided by the association so you are prepared to provide them or to pay another party to provide them.
     
  4. Ask if there have been any special assessments, or if there is a pending special assessment. 

In reviewing the association’s balance sheet, look at the amount of delinquent assessments and accounts payable if the financial reporting is on an accrual basis. The balance sheet will also inform you as to whether the association has any outstanding loans or other long-term liabilities. The income statement will quickly reveal whether the budget for the current year is adequate or if there are significant accounts over budget. Having this information can help you project if your fees will increase or stay comparable.


There are so many important items to consider when purchasing a home in a condominium or planned community association. Don’t feel overwhelmed, but be armed and educated! More useful information regarding condominium and community associations can be found in your Board Toolbox as well as our other blog articles.