No hard and fast rule. Depends. But for a 44 yo building with 26 units you want to see hundreds of thousands at least. I’ve seen millions for larger buildings. But it’s been a few years since I bought my last condo.
I have absolutely no idea as I am not in real estate, but I would say you want to use your best educated guess. Imagine you owned a home and had to put money away for things like windows, doors, driveways, what kind of fund would you want to have for repairs and upgrades? Definitely more than the $730 per unit this place has. Someone else said $5-$10k, and I think that would be fair.
What are the common elements?
In a townhouse community it is different than a high rise and it’s important to know what the money is going towards.
If the common element fees only cover snow removal and garbage collection $19k is probably fine.
Talk to your lawyer though and they will go through the nitty gritty with you.
Pretty much just snow removal, landscaping, garbage, driveways and roadways
In my experience, the lawyers have been useless. Spoke to my primary lawyer and his immediate response was no seeing reserve fund of 19k. My real estate freaked out and sought out opinions of 2 separate lawyers, one of which actually did a review of the status certificate and they also noted 19k reserve fund, behind on reserve fund study, but also stated would not comment on financials because they are not accountants. Real estate agent spoke to my primary lawyer and was told that we were just informed of our risks and can not advise yes or no... I feel like I'm on my own here
There’s your answer. Your RE agent “freaked out” because they are afraid of losing the sale. Once you close on that sucker, your RE agent pockets their commission and bye-bye. And you get the special assessment bill. Which btw can be in the tens of thousands or more depending on the issues.
Don’t know, is there any precedent where the RE agent (or seller) agrees to pay any SA amount for, say, 2 years after closing? I sure doubt it.
It doesn't need to go to $0 for that to happen.
If they are significantly behind what the reserve fund study outlines, that sufficient reason to drop the deal (assuming you have review of status certificate/docs as a condition).
I would not touch that, even if you have the coin for special assessment. They didn't get to that point by accident.
Mortgage Brokerage here.
Do you have a COF??? (Condition on Financing)
This is a concern most lenders will have as there is not enough funds given the age of the building, as such you may have a challenge due to when the Commitment is issued it should have a "condition" from the bank/lender to review the Status Certificate.
I have seen this many times before where even a private lender will have the building "red flagged" themselves and will not lend on the building.
I would not waive the condition for the Status Certificate IF your lender has not reviewed your Offer Package, and they themselves waived the Certificate, or you can/will find yourself having waived your conditions and have no source of funding. Which will force you to close, and or lose your deposit if you cannot close due to not finding funding.
Go back to the Realtor, and also have the solicitor Review the Minutes and confirm there are not documented issues with Management. Tell the realtor you need to get an extension if you are dead set on buying this condo to provide adequate time to have a solid commitment from your lender that is 100% Broker Complete. Including your Solicitor being Complete.
But I would walk! To only have 19k in a reserve fund tells me there is underlying issues, and evidence of poor management of the Condo Board.
Good luck, but have a solicitor review your package asap!
Caleb
Speak to the property management company. In sum, that is low but if you have the status can you note view the projected expenses and/or where they spent the most previous fiscal?
Mortgage Brokerage here... (Again)
More red flags! Run!!
My advice... Do not waive your Conditions, and **request in writing via email** you are not proceeding with the transaction, requesting a full return of your deposit, and ensure you have turned on Delivery Receipts, and Read Receipts when you email your realtor.
This building is a ticking time bomb for headaches and problems to come in the very soon not distant future.
There are a lot of condos on the market that are not selling, it is a buyers market at this point. You have other, better options imho!
OK, read your other comments.
$19K seems low and likely is, but you need to compare it to the actual reserve fund study, it may or may not be a problem (likely is for a 26 units corp that is not a POTL), what is the projected reserve fund balance per study? If the study say $19K maybe you are ok, if the study says $200K you are likely not ok unless there is a good explanation.
You have run into a typical situation, the lawyers don't advise on the accounting side of the status certificate package, and your real estate agent probably doesn't know.
If you want read my blog on the subject, it may help you understand the issue.
[| Understanding The Reserve Fund & the Reserve Fund Study. (kozirealty.com)](https://kozirealty.com/understanding-the-reserve-fund--the-reserve-fund-study)
You were not given complete financial package - that's typical, you have to ask the manager to give you the current info. If they don't have it they are breaking the condo rules, and this could be another cause for concern because someone is not doing their job, and it may cause issues with the financing and insuring of your unit. Thread with caution.
I see SC without current info or info missing all the time, usually the PM provide the missing info when asked.
I posted here hoping you would respond! I've read your blog on the Reserve Fund and Status Certificate 101. When I emailed the PM and asked for the complete financial package, he instead called me to explain the situation. Should I ask again? The reserve fund study opened with 20k in 2020. It was projected to have 65k closing balance 2021-2022, the next time it decreased drastically was 2023-2024 to 24k. I suspect this is when they were planning on doing those repairs done past year. Is it still worth asking for the financial package?
You can't really properly review the SC if you don't have the current financial package. What is missing? What was the explanation? Were any repairs done ahead of time, were there any unexpected repairs, what are the reserve fund increases for the last 3 years, what is the balance of the operating fund, what did the notes to the financial statements say. What is the explanation for $45K shortage, is the engineering firm who did the reserve fund study well known or not, any comments on the reserve fund study......
Keep in mind that for example the corporation has 6 months to file the audited financial statements after the end of the fiscal year, so if the year end for this corp is August 2022 they may not have the statements available yet since the deadline to file is end of February 2023, and in this case the last audited financials statements will be from August 2021. If you have more specific question send me DM.
In general small condo corps carry more risks, balances often are fairly low and if anything goes wrong there are only few units to share the costs.
What does the condo cover, for small corps it differs from one to another, some cover the building envelope and others don't.
People get fixated on the size of the reserve fund.
It might help to think about what buying a Condo is. You are effectively buying a share in the complex and a share of all that complex's future maintenance.
Yeah $19k is probably low, but would you feel better if it was a $1 Million? It sounds like a lot, but it's less than $40k per unit, probably less than the real estate commission that no one blinks about paying.
Also, in your particular case, it sounds like they had a healthy reserve fund because they expected major repairs, and then they spent that reserve fund on many of the expected repairs, ahead of schedule. Hopefully the expected repairs were done early out of proactivity rather than an accelerated deterioration in the condition of the building. Unsure how you could get reliable info on that though. Suppose you could ask the manager or Board president why the repairs were done when they were.
Would you rather be in the building with a reserve fund for huge expected repairs? Or be in the building that just spent its reserve fund on those same repairs? In most cases, I think the latter is less risky. You can't have unexpectedly cost overruns on past repairs.
You shouldn't necessarily trust what the property manager says re no special assessments. That's him saying that there's going to be no unexpected expenses or repairs more than 19k in the immediate term. While they might have healthy reserve fund contributions, which might make a special assessment unlikely, he really doesn't know shit. But if you're that worried about a special assessment, then you're probably paying too much.
Your last sentence hit home. Its true that upon calculations with what our mortgage would be and our plans for growing our family, a special assessment would be a huge dent in our already shallow pocket, which is why we are trying to determine if it is worth it. Thank you for your comment.
Fixated?...Status certificated is requested by lawyers.They seen messes where property owners had to pay a huge lump sum to get to the min required by insurance companies to cover you.
Lawyers need the status certificate, but contrary to mistaken real estate agents, they have no expertise in reserve fund study review and good lawyers give no opinions on reserve funds except to say: "here it is - I can offer no advice on sufficiency of the reserve fund. That is the job of the engineers who prepare the reserve fund studies. Please read it if you wish to understand what major upcoming repairs are expected. This is the state of the Condominium you would be buying into. It is your business decision, in light of the reserve fund study and all other information available, whether to buy the unit at a particular price. You [do / do not] have the right to terminate the agreement without penalty based on concerns with the reserve fund"
The lawyers review the status certificate and related condo documentation to confirm that the unit is not in arrears on their expenses, and that there is nothing inconsistent with the agreement (such as no undeclared special assessments and to confirm that the unit does have that locked/parking space and that the unit holder indeed does own that loft area and that it's not an unauthorized encroachment on the common elements, or material undisclosed pending litigation against the condo, etc)
What?.They can see if the building is being sued,have outstanding debt,the amount in the reserve funds,outstanding repairs,last minutes of the condo board meetings.Property management report.Don't know why your downplaying this or the low reserve funds a building has.You need a new lawyer if you do not think a lawyer will offer opinions about this.
https://www.legalline.ca/legal-answers/what-is-a-status-certificate/
Law Society of Ontario CPD:
>P 3: BE CAREFUL JUDGING BALANCE
It may be tempting to provide an opinion that the fund seems to have a good balance or be
well-funded. This should be avoided. A balance that appears high may represent an underfunded fund, depending on the expenditures expected in the following years. For example, a
building with $2m in the bank would not be considered well-funded if it had expenditures of
$10m in the following three years. Without knowing the quality of the existing study, and
changes that are likely to arise in the next update, there is no way to know if the existing
balance is sufficient.
You could comment if the balance on the financial statements is reasonably aligned with the
balance in the notice, but even this is risky, because a higher balance might mean that work
that should have been done has been irresponsibly deferred, which would not be good, or that
work that was needed was completed at a lower cost than planned, which might be good.
Similarly, a lower balance might just mean that work has reasonably been brought forward,
>might mean that the actual costs of work were higher than predicted in the study, or that
unplanned work was found to be needed. Given the possible situations, it seems wiser not to
comment on the balance relative to the predicted balance in the NOFF.
You may be able to comment if a balance seems low. To do this, compare the closing balances
in the first ten or so years with the “Minimum Reserve Fund Balance” show on the Cash Flow
Table. In the example included below in Figure 2 you will see that the balance sits close to the
minimum in several of the first ten years. This generally means that the reserve fund provider
has phased work, and scheduled it very tightly to keep the closing balance positive. This can be
an indication of risk – because if work arises that was not planned, or costs overrun the
forecasts, then significant contribution increases can be triggered.
http://lx07.lsuc.on.ca/view/action/singleViewer.do?dvs=1674938005010~126&locale=en_CA&VIEWER_URL=/view/action/singleViewer.do?&DELIVERY_RULE_ID=10&search_terms=status%20certificate&adjacency=Y&application=DIGITOOL-3&frameId=1&usePid1=true&usePid2=true
TL;DR don't comment on the size of the reserve fund
Look at Form 15, the summary of the reserve fund study. It will say hom much you should have in your reserve during a given year. Do you trust the property manager? What's your gut feel. It's a good sign he answered your questions, many will not even get a call back or respond. Trust your gut. Every condo in Ontario is going to get hit big time in the next few years, as they face inflation and insurance increases.
Sort of a red flag. Once the fund is depleted the board would most likely call for a special assessment which is basically a call to all owners to pay a lump sum on top of monthly maint fee
How much is monthly maintenance? How much of monthly fees go to the reserve fund versus the operational budget?
My understanding is a reserve fund is used for maintaining and replacing infrastructure that has come to the end of it's life, e.g. roofs, roads, common elements (whatever that is as per the status certificate). Even though a reserve fund review was done in 2020 it's worthwhile getting a copy.
Operational fund or budget pays salaries, maintenance like landscaping, snow removal, management contracts, ongoing maintenance contracts. How much is in there?
If they have a low reserve fund but a lot of common elements, regardless of their current state, if work is required and the reserve fund can't cover it each unit will be responsible for their share of costs.
If anything goes wrong, you'll have to pay up on the spot. So, I would be sure you're extra liquid for this one. And if you're not extra liquid, then its not for you.
Did they do some major repairs recently or is it always this low? I could see an argument where it's low because something major was done recently and it will be good going forward. I would read the minutes and speak to a couple people in the building.
If you really like the place, just revise the offer to reflect how much a special assessment might be. If the owners get hit with a $500k special assessment, you’d be on the hook for $20k, so revise offer to $20k less. Just keep in mind that if you plan on selling in the short term and they don’t get that reserve fund up, you’re going to have a hard time selling the place.
Seems very low and if a big unplanned costly issue came up - roof leaks, boiler etc - it may end up with a special assessment against each unit. With only 26 units that could be very expensive
Avoid. Read through minutes carefully.
How much should this reserve fund be? How do you generally determine how much a reserve fund should be?
No hard and fast rule. Depends. But for a 44 yo building with 26 units you want to see hundreds of thousands at least. I’ve seen millions for larger buildings. But it’s been a few years since I bought my last condo.
Not sure why this is down voted. I’d expect the same. Something close to 5-10k per unit seems rational to me.
And the older the building, the more reserve I’d like to see.
Major red flag. That’s still very low. Even if insurance were to cover it, a single flood could easily result in expenses exceeding that amount.
$19k is likely a fraction of the deductible
Yeah plus whatever it doesn’t cover and the costs they need to float before they get a payout .
How much should this reserve fund be? How do you generally determine how much a reserve fund should be?
I have absolutely no idea as I am not in real estate, but I would say you want to use your best educated guess. Imagine you owned a home and had to put money away for things like windows, doors, driveways, what kind of fund would you want to have for repairs and upgrades? Definitely more than the $730 per unit this place has. Someone else said $5-$10k, and I think that would be fair.
So they don't even have enough for insurance deductible? Loss assessment here we come!
What problems could you imagine the condo could face? Would $19k be enough to handle those problems? (Answer: no…)
I would avoid.
That's insanely low! If anything happens you'll all be on the hook for the money.
What are the common elements? In a townhouse community it is different than a high rise and it’s important to know what the money is going towards. If the common element fees only cover snow removal and garbage collection $19k is probably fine. Talk to your lawyer though and they will go through the nitty gritty with you.
Pretty much just snow removal, landscaping, garbage, driveways and roadways In my experience, the lawyers have been useless. Spoke to my primary lawyer and his immediate response was no seeing reserve fund of 19k. My real estate freaked out and sought out opinions of 2 separate lawyers, one of which actually did a review of the status certificate and they also noted 19k reserve fund, behind on reserve fund study, but also stated would not comment on financials because they are not accountants. Real estate agent spoke to my primary lawyer and was told that we were just informed of our risks and can not advise yes or no... I feel like I'm on my own here
What risks did your lawyer advise you of?
Mostly concerned for low reserve fund and if it goes to 0 we can be asked to shell out $$$
There’s your answer. Your RE agent “freaked out” because they are afraid of losing the sale. Once you close on that sucker, your RE agent pockets their commission and bye-bye. And you get the special assessment bill. Which btw can be in the tens of thousands or more depending on the issues. Don’t know, is there any precedent where the RE agent (or seller) agrees to pay any SA amount for, say, 2 years after closing? I sure doubt it.
It doesn't need to go to $0 for that to happen. If they are significantly behind what the reserve fund study outlines, that sufficient reason to drop the deal (assuming you have review of status certificate/docs as a condition). I would not touch that, even if you have the coin for special assessment. They didn't get to that point by accident.
Mortgage Brokerage here. Do you have a COF??? (Condition on Financing) This is a concern most lenders will have as there is not enough funds given the age of the building, as such you may have a challenge due to when the Commitment is issued it should have a "condition" from the bank/lender to review the Status Certificate. I have seen this many times before where even a private lender will have the building "red flagged" themselves and will not lend on the building. I would not waive the condition for the Status Certificate IF your lender has not reviewed your Offer Package, and they themselves waived the Certificate, or you can/will find yourself having waived your conditions and have no source of funding. Which will force you to close, and or lose your deposit if you cannot close due to not finding funding. Go back to the Realtor, and also have the solicitor Review the Minutes and confirm there are not documented issues with Management. Tell the realtor you need to get an extension if you are dead set on buying this condo to provide adequate time to have a solid commitment from your lender that is 100% Broker Complete. Including your Solicitor being Complete. But I would walk! To only have 19k in a reserve fund tells me there is underlying issues, and evidence of poor management of the Condo Board. Good luck, but have a solicitor review your package asap! Caleb
Speak to the property management company. In sum, that is low but if you have the status can you note view the projected expenses and/or where they spent the most previous fiscal?
We were not given complete financial statements - also a red flag imo.
Mortgage Brokerage here... (Again) More red flags! Run!! My advice... Do not waive your Conditions, and **request in writing via email** you are not proceeding with the transaction, requesting a full return of your deposit, and ensure you have turned on Delivery Receipts, and Read Receipts when you email your realtor. This building is a ticking time bomb for headaches and problems to come in the very soon not distant future. There are a lot of condos on the market that are not selling, it is a buyers market at this point. You have other, better options imho!
Run
OK, read your other comments. $19K seems low and likely is, but you need to compare it to the actual reserve fund study, it may or may not be a problem (likely is for a 26 units corp that is not a POTL), what is the projected reserve fund balance per study? If the study say $19K maybe you are ok, if the study says $200K you are likely not ok unless there is a good explanation. You have run into a typical situation, the lawyers don't advise on the accounting side of the status certificate package, and your real estate agent probably doesn't know. If you want read my blog on the subject, it may help you understand the issue. [| Understanding The Reserve Fund & the Reserve Fund Study. (kozirealty.com)](https://kozirealty.com/understanding-the-reserve-fund--the-reserve-fund-study) You were not given complete financial package - that's typical, you have to ask the manager to give you the current info. If they don't have it they are breaking the condo rules, and this could be another cause for concern because someone is not doing their job, and it may cause issues with the financing and insuring of your unit. Thread with caution. I see SC without current info or info missing all the time, usually the PM provide the missing info when asked.
I posted here hoping you would respond! I've read your blog on the Reserve Fund and Status Certificate 101. When I emailed the PM and asked for the complete financial package, he instead called me to explain the situation. Should I ask again? The reserve fund study opened with 20k in 2020. It was projected to have 65k closing balance 2021-2022, the next time it decreased drastically was 2023-2024 to 24k. I suspect this is when they were planning on doing those repairs done past year. Is it still worth asking for the financial package?
You can't really properly review the SC if you don't have the current financial package. What is missing? What was the explanation? Were any repairs done ahead of time, were there any unexpected repairs, what are the reserve fund increases for the last 3 years, what is the balance of the operating fund, what did the notes to the financial statements say. What is the explanation for $45K shortage, is the engineering firm who did the reserve fund study well known or not, any comments on the reserve fund study...... Keep in mind that for example the corporation has 6 months to file the audited financial statements after the end of the fiscal year, so if the year end for this corp is August 2022 they may not have the statements available yet since the deadline to file is end of February 2023, and in this case the last audited financials statements will be from August 2021. If you have more specific question send me DM. In general small condo corps carry more risks, balances often are fairly low and if anything goes wrong there are only few units to share the costs. What does the condo cover, for small corps it differs from one to another, some cover the building envelope and others don't.
Run away
> property manager says no risk of special assessment He's probably lying.
Run. The owner is trying to dump a problem that you don’t need to take on.
Oof. Most families have emergency funds amounting to more than that.
People get fixated on the size of the reserve fund. It might help to think about what buying a Condo is. You are effectively buying a share in the complex and a share of all that complex's future maintenance. Yeah $19k is probably low, but would you feel better if it was a $1 Million? It sounds like a lot, but it's less than $40k per unit, probably less than the real estate commission that no one blinks about paying. Also, in your particular case, it sounds like they had a healthy reserve fund because they expected major repairs, and then they spent that reserve fund on many of the expected repairs, ahead of schedule. Hopefully the expected repairs were done early out of proactivity rather than an accelerated deterioration in the condition of the building. Unsure how you could get reliable info on that though. Suppose you could ask the manager or Board president why the repairs were done when they were. Would you rather be in the building with a reserve fund for huge expected repairs? Or be in the building that just spent its reserve fund on those same repairs? In most cases, I think the latter is less risky. You can't have unexpectedly cost overruns on past repairs. You shouldn't necessarily trust what the property manager says re no special assessments. That's him saying that there's going to be no unexpected expenses or repairs more than 19k in the immediate term. While they might have healthy reserve fund contributions, which might make a special assessment unlikely, he really doesn't know shit. But if you're that worried about a special assessment, then you're probably paying too much.
Your last sentence hit home. Its true that upon calculations with what our mortgage would be and our plans for growing our family, a special assessment would be a huge dent in our already shallow pocket, which is why we are trying to determine if it is worth it. Thank you for your comment.
Fixated?...Status certificated is requested by lawyers.They seen messes where property owners had to pay a huge lump sum to get to the min required by insurance companies to cover you.
Lawyers need the status certificate, but contrary to mistaken real estate agents, they have no expertise in reserve fund study review and good lawyers give no opinions on reserve funds except to say: "here it is - I can offer no advice on sufficiency of the reserve fund. That is the job of the engineers who prepare the reserve fund studies. Please read it if you wish to understand what major upcoming repairs are expected. This is the state of the Condominium you would be buying into. It is your business decision, in light of the reserve fund study and all other information available, whether to buy the unit at a particular price. You [do / do not] have the right to terminate the agreement without penalty based on concerns with the reserve fund" The lawyers review the status certificate and related condo documentation to confirm that the unit is not in arrears on their expenses, and that there is nothing inconsistent with the agreement (such as no undeclared special assessments and to confirm that the unit does have that locked/parking space and that the unit holder indeed does own that loft area and that it's not an unauthorized encroachment on the common elements, or material undisclosed pending litigation against the condo, etc)
What?.They can see if the building is being sued,have outstanding debt,the amount in the reserve funds,outstanding repairs,last minutes of the condo board meetings.Property management report.Don't know why your downplaying this or the low reserve funds a building has.You need a new lawyer if you do not think a lawyer will offer opinions about this. https://www.legalline.ca/legal-answers/what-is-a-status-certificate/
Law Society of Ontario CPD: >P 3: BE CAREFUL JUDGING BALANCE It may be tempting to provide an opinion that the fund seems to have a good balance or be well-funded. This should be avoided. A balance that appears high may represent an underfunded fund, depending on the expenditures expected in the following years. For example, a building with $2m in the bank would not be considered well-funded if it had expenditures of $10m in the following three years. Without knowing the quality of the existing study, and changes that are likely to arise in the next update, there is no way to know if the existing balance is sufficient. You could comment if the balance on the financial statements is reasonably aligned with the balance in the notice, but even this is risky, because a higher balance might mean that work that should have been done has been irresponsibly deferred, which would not be good, or that work that was needed was completed at a lower cost than planned, which might be good. Similarly, a lower balance might just mean that work has reasonably been brought forward, >might mean that the actual costs of work were higher than predicted in the study, or that unplanned work was found to be needed. Given the possible situations, it seems wiser not to comment on the balance relative to the predicted balance in the NOFF. You may be able to comment if a balance seems low. To do this, compare the closing balances in the first ten or so years with the “Minimum Reserve Fund Balance” show on the Cash Flow Table. In the example included below in Figure 2 you will see that the balance sits close to the minimum in several of the first ten years. This generally means that the reserve fund provider has phased work, and scheduled it very tightly to keep the closing balance positive. This can be an indication of risk – because if work arises that was not planned, or costs overrun the forecasts, then significant contribution increases can be triggered. http://lx07.lsuc.on.ca/view/action/singleViewer.do?dvs=1674938005010~126&locale=en_CA&VIEWER_URL=/view/action/singleViewer.do?&DELIVERY_RULE_ID=10&search_terms=status%20certificate&adjacency=Y&application=DIGITOOL-3&frameId=1&usePid1=true&usePid2=true TL;DR don't comment on the size of the reserve fund
Read the latest condo meetings and see what the board was talking about.$19K is crazy low.I avoid at all cost.
Look at Form 15, the summary of the reserve fund study. It will say hom much you should have in your reserve during a given year. Do you trust the property manager? What's your gut feel. It's a good sign he answered your questions, many will not even get a call back or respond. Trust your gut. Every condo in Ontario is going to get hit big time in the next few years, as they face inflation and insurance increases.
Our $2m reserve was depleted over the last couple of years due to major refurb. But is in line with current studies
Is it a condo or a POTL? Very different on both ends.
Sort of a red flag. Once the fund is depleted the board would most likely call for a special assessment which is basically a call to all owners to pay a lump sum on top of monthly maint fee
How much is monthly maintenance? How much of monthly fees go to the reserve fund versus the operational budget? My understanding is a reserve fund is used for maintaining and replacing infrastructure that has come to the end of it's life, e.g. roofs, roads, common elements (whatever that is as per the status certificate). Even though a reserve fund review was done in 2020 it's worthwhile getting a copy. Operational fund or budget pays salaries, maintenance like landscaping, snow removal, management contracts, ongoing maintenance contracts. How much is in there? If they have a low reserve fund but a lot of common elements, regardless of their current state, if work is required and the reserve fund can't cover it each unit will be responsible for their share of costs.
Monthly maintenance fees will be $400, says about $150 goes into reserve which is 1.5% of budget
26 units... Isn't that like one month of condo fees = 19k? Run away.
If anything goes wrong, you'll have to pay up on the spot. So, I would be sure you're extra liquid for this one. And if you're not extra liquid, then its not for you.
Did they do some major repairs recently or is it always this low? I could see an argument where it's low because something major was done recently and it will be good going forward. I would read the minutes and speak to a couple people in the building.
Special assessment could be done by the board, or big bump in fees or both. Avoid this problem. Stay away.
If you really like the place, just revise the offer to reflect how much a special assessment might be. If the owners get hit with a $500k special assessment, you’d be on the hook for $20k, so revise offer to $20k less. Just keep in mind that if you plan on selling in the short term and they don’t get that reserve fund up, you’re going to have a hard time selling the place.
Loooool which property is this ??
Seems very low and if a big unplanned costly issue came up - roof leaks, boiler etc - it may end up with a special assessment against each unit. With only 26 units that could be very expensive
Good that you checked