1. What is the percentage of owner occupied units?
2. What covenants, by-laws, and restrictions govern the property?
3. How much money does the association keep in reserve?
4. Are association dues keeping pace with the rate of inflation?
5. What exactly do the association dues cover?
6. What special assessments have there been in the last 5 years?
7. How much turnover occurs in the building?
8. Is the association in litigation?
9. How often does the association meet?

Generally, a higher percentage of owner occupied units means the condo will be more marketable upon resale. Also, owner occupants also tend to treat the building and common areas better than tenants and non-owner. Also, some mortgage banks require greater than 50% owner occupants to qualify for their underwriting criteria. This is usually not too difficult to get an exception for, but it is definitely something to keep in mind.

Right away, you want a full copy of the association by-laws and master deed to read through. Are there rental restrictions? Pet restrictions? Noise restrictions? This is definitely something to read carefully and also have your attorney read for you to ensure there are no unusual restrictions that you could not live within.

When you buy a condo, you are not just buying a unit, you are also buying a portion of the building. All associations should keep money in a reserve account for any emergency repairs or necessary capital improvements to ensure liquidity. You want to find out how much the association has and how they keep the money. Is it in a checking account or is it invested (it should be kept liquid in case of emergency)? In a building with a good healthy reserve account, you are much less likely to have to come out of pocket for a special assessment to cover excess costs.

Beware of any associations that have not raised their dues in many years. As well all know, the cost of living goes up every year, and building expenses like utility bills, management costs, cleaning, maintenance, etc. are no exception. Raising dues to keep pace with rising costs makes good fiscal sense. There should be a small cushion in the budget to help build the reserve account.

A copy of the previous three years budgets will show you exactly where the association dues are being spent. Don’t just take an owners word for what is covered, make sure to carefully review the budget (with an attorney or accountant) to see what is being spent. You want to see a balanced budget and an association running a small surplus to help build a reserve account.

How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy. Ask what the assessments were spent on and see what the results were.

You want to know how much turnover occurs each year in both the owner occupied units and in the rented units. Lower turnover is generally a good sign, as it usually means people are happy in the building. This is not always the case though, so talking to your potential neighbors is also a good idea.

If an association is in litigation, the reserves can be quickly depleted and unit owners may face a special assessment for legal fees. If this is the case, get the facts of what exactly the lawsuit is for and what the status is before moving forward. Many mortgage banks will also not finance a property in litigation without a clear and verifiable explanation.

Ask when and where the association meets. There should be some set schedule of meetings and minutes for past meetings, although smaller associations may be a bit more informal. Ask for the minutes to past meetings to see what has been discussed lately and what direction the association is headed. Find out who the trustees of the association are and ask to speak with them to get a better feel for the association and its governance.