Purchasing a condo

Reviewing and understanding a condominium’s declaration and bylaws is extremely important. These documents stipulate nearly every aspect of condominium living — from the election of the board of directors of the condominium association, to whether you may lease your unit, to owning pets.

Q. What laws and rules govern a condominium?

A. There is a hierarchy of laws and rules by which a condominium is formed and run:

• The highest authority in any jurisdiction is the applicable state condominium law.

• The second level of authority is the condominium "declaration", a document that is recorded among the land records in the jurisdiction where your property is located. The declaration not only states that a condominium has been created, but also outlines and defines certain important aspects, including the three components of a condominium:

  • General common elements

  • Limited common elements

  • Individual units

• The third level of authority is the bylaws of the condominium, which detail the basic operating guidelines under which the condominium association is to function.

• Lastly, the rules and regulations of the condominium association that are promulgated by the board of directors make up the fourth level of authority.

These rules and regulations cannot conflict with any of the higher levels of authority. Moreover, the board of directors cannot change the condominium’s bylaws; only the owners can amend the bylaws, in accordance with the procedures spelled out in those documents. Typically, a super-majority vote (usually either 66.7 percent or 75 percent) of all the condominium owners is required to change the bylaws.

Q. What is a condominium "unit"?

A. The condominium declaration creates the individual units from the entire parcel of property. The plat attached to the declaration specifies the boundaries of the unit. Typically, units constitute the air space dimensions of an apartment, the space between the unfinished surfaces of the walls and of the ceiling and floor.

The portions of the property that are not individual units, e.g., the exterior of the building and the grounds of the property, are common elements owned by all of the unit owners as tenants in common according to their percentage interests as defined in the condominium declaration.

Q. What expenses do my condominium fees cover?

A. The expenses that are paid by condominium fees vary from association to association. Some associations collect for utility bills (e.g., water, electric). Typically, the condominium association uses the fees to pay for management activities and any maintenance requirements, including day-to-day obligations for trash removal, exterior painting, plumbing and so forth.

Q. What are "special assessments"?

A. Special assessments can sometimes be charged by a condominium association in order to pay for a major, usually unforeseen, expenditure, such as the repair of the roof or repaving of the parking lot.

Q. Do I need to carry my own insurance policy for my condominium unit?

A. It is the responsibility of the condominium association and the board of directors to maintain both liability and casualty insurance coverage on the property for which the association is responsible, i.e., the common elements of the condominium. You may choose to carry an individual insurance policy to cover your condominium unit and personal belongings.

NOTE: In Maryland there has been a recent change in the law. Pursuant to Section 11-114(g)(2), the Maryland Condominium Act-Unit Owner Liability provides that the bylaws of a condominium association may require that a unit owner be responsible for the insurance deductible amount (not to exceed $1,000.00) under a property insurance policy for damage incurred to the condominium from a cause originating in the owner’s unit. The Act further provides that all other deductible amounts are common expenses.

Q. Can a condominium association prohibit renters?

A. An association may restrict or prohibit the renting of units by properly amending its declaration and/or bylaws. Generally, property values increase and the ability to obtain mortgage financing becomes easier when an association has imposed leasing restrictions.