Buyers Blog Update 12/01/2021
Association Documents
For this article, both condominiums and townhouses will be referred to as condos. Oahu has more condos than single-family homes due to the island’s finite land supply. In some neighborhoods, developers decided to create a neighborhood under a condominium regime to avoid some of the City and County of Honolulu’s red tape involved with sub-dividing land. Condos are generally more affordable than single-family homes and make up a bulk of entry level housing. The Oahu median price for a single-family home in October 2021 was $1,000,000 and for a condo was $500,000. Condos make up the bulk of entry level homebuying opportunities for first-time home buyers as a result.
Condos add a level of complexity to owning a home that first-time buyers may not appreciate and adds an additional step to a buyer’s due diligence. Oahu’s standard purchase contract dedicates a page to the documentation disclosure and review requirements before a buyer can successfully complete a condo sale. The list of documents includes:
- The last three approved Board of Director meeting minutes
- Articles of Incorporation and Amendments
- Bylaws and Amendments
- Copies of all pending litigation complaints filed against the association
- Covenants, Conditions, and Restrictions (CC&Rs)
- Current association financial statements
- Current and/or proposed budgets
- Current House Rules
- Declaration and Amendments
- Design standards and guidelines
- Insurance summary
- Lender’s disclosures
- Last annual meeting minutes
- Planned community documents
- Project information form (RR105c)
- Reserve study or summary
- Subdivision and/or title documents
Companies exist simply to collect and distribute the vast documentation describing a condo association’s operation and efficiency. Buyers should carefully review the documents before committing to a condo purchase because the association fees paid are only the financial burden that a buyer commits to when closing a sale. There is much more to consider than just the monthly cost of joining a condo association and a first-time buyer should carefully read the documents to understand the implications.
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