Tag Archives: HOA

Assessing the Association

I was recently talking with a first time buyer about the assorted contingencies that she’ll have to fall back on if she puts in an offer on a property. For those of you not accustomed to real estate lingo, contingencies can be thought of as “escape routes” – they’re reasons you can use to get out of your purchase contract. If you’re working off of a standard Chicago area housing contract to purchase a condo, you’ll usually be able to use the following reasons to get out of your purchase contract:

  • Inspection contingency (Major problems with the property found by a licensed home inspector)
  • Lawyer review contingency (Problems in the purchase contract language)
  • Home sale contingency (If you have to sell your current home first before you can buy a new one)
  • Loan contingency (No loan, no property.)
  • Condo association contingency (Problems with the bylaws or financial status of the condo association.)

Plane image adapted from a United Airlines safety card. Thank you for flying CondoAir.

I mentioned that buyers often do not see the bylaws, financial statements and meeting minutes of a condo association until just a few days before closing.

“Isn’t that really late in the game to be finding out that kind of information?” she asked. “Shouldn’t you know the financial health of the association before you make an offer?”

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Making It Your Own vs Just Owning

Today: Extreme home decorating, TRON style! (Just kidding. Well, about the TRON bit, at least.)

I used to work in Chicago’s ample theatre scene for several years before I got into real estate. In fact, theatre is what brought me out here – I started my Chicago tenure with a year-long stage management internship at Steppenwolf in the late 90’s. The best introduction to this article that I can think of involves reaches back to those days for the story of a set designer who was pretty well known in Chicago for her adventurous scenery endeavors.

Normally when a set designer first visits a performance space he or she will take measurements of the existing dimensions so that they can create a set that will fit on the existing stage. This is logical. The designer I’m speaking of would walk into the theatre with her plans already fixed in her mind and start her assessment of the space with “okay, first off we’ll need to knock out the back wall of the building.” Most of the time she was quite serious about this opening volley and would have to be negotiated down to something that left the masonry reasonably intact.

Oddly enough, her sets wound up being the most creative and best suited to the scripts they surrounded than any of the others I’ve seen to date.

So what does this have to do with the real estate market?

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Association Rentals: What tenants need to know

Cheeky eviction notice

What happens when a condo owner falls behind on their assessments?

One of the reasons renters give for wanting to become homeowners is that they never want to risk being thrown out of their home again. Once you own a piece of property, nobody can throw you out of it without reason, right? When a Condominium Board is involved, this is not always the case.

You see, when you buy a condo in Illinois, you buy air space. You are entitled to the air space in your condo plus the surface of your walls and floor, and a percentage of the rest of the building. Everyone is jointly responsible, through their condo assessments and participation in the association, for the upkeep of the common areas, and building exterior.  It’s a very socialist kind of system when you think about it.

When a condo owner falls behind on their assessments, the board can wind up falling short on their accounts, making them unable to pay for shared items like the water bill, the landscaping bill, or even the building’s insurance policy. The state of a condo association’s finances can affect the ability of buyers to get loans to buy into the building. Therefore, if an owner gets very far behind, the condo board has the right to take them to court and evict them.

Once the owner is out, the board can rent out the condo to a tenant, whose rent will go in part towards the payment of the evicted owner’s back assessments.

Illinois Legal Aid has a great article about this for condo owners. But what does it mean for tenants?

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