In our last article, we discussed the first 4 of these 7 questions that can give Florida condo buyers more insight into an association’s financial and legal health.
Remember that buyers don’t just buy an individual condominium unit, they become members of the Condominium Owners Association (COA) and part owners of all the Association’s properties and common areas.
Our 7 questions are largely based on lender qualification standards for approving financing on individual condominium units in Florida, combined with due diligence when reviewing any real estate purchase.
5) How many units in the building or community are owned and occupied either as primary or secondary residences?
The lender’s basic standard here is that at least half of the individual units must be owned as primary or secondary residences. In actual practice and preference, a more desirable concentration would be at least 70% owner-occupied as a primary or secondary residence.
Investor-owned units present a much higher risk of default than owner-owned units. Prolonged tenant vacancies can reduce cash flow for investor owners, jeopardizing COA appraisal payments.
Planned appraisals are often referred to as “dues” or “fees” by many condo owners.
It has also been suggested that owners tend to take better care of condominiums and common areas than tenants.
