Unlike a single-family home that sits on its own parcel or lot, a condominium is made up of multiple properties that each have a percentage interest in a single lot or parcel. These are known as condominium units.
Did you know that on Kauai, it isn’t just high-rise buildings or townhouse-type construction that can be ‘condominiumized’? Vacant land can also be divided into units.
There are often common elements and limited common elements involved with a condominium regime. Because there is commonality, and more than one unit, there is a declaration document to define the units and their common and limited common elements.
As a condominium buyer, you should receive all the condominium documents during the disclosure phase of the transaction, including the condominium declaration documents.
Among the documents, will be association documents if an association exists.
Be sure to look for any record of special assessments related to the condominium property. If there are common and limited common elements that require unplanned and unbudgeted funding for any reason, there will be a record of a special assessment. There are rules and laws regarding the establishment of a special assessment.
Ideally, the association members (unit owners) have regular meetings and there are records of the meetings. Such records can be useful to understand what special assessments have been made and if any are foreseen.
Association fees may or may not be sufficient to cover unexpected costs, so it is good to consider if the association fees are contributing to a budget and to understand if the budget has sufficient funds to cover special assessments that may arise.
Due diligence is extremely important, read the condominium documents and understand the conditions of the condominium regime you intend to become a part of.