Assessments. All condominiums, whether they are in large high-rises with 24-hour doorman or in a small 3-unit building with virtually no amenities, have assessments. Assessments pay for employee salaries, building maintenance and condo association management fees. They should be added to your mortgage and taxes payments when you determine your monthly payments. In some buildings they can be almost as much as your mortgage payment.
Health of the condo association. The last thing you want to do is purchase a home in a poorly run building. A building with little or no financial reserves and/or poor maintenance can end up costing you thousands in special assessments. Homeowners that are unaware of the health of their building may be forced to pay money that they cannot afford. Special assessments will also hamper the sale of your home as well.
The building. When you buy a house you own the entire building and the land. When you buy a condo you own a percentage of the building and no land.
Maintenance and repairs. Home ownership means that you are responsible for the leaky roof, the moldy basement or the cracked driveway. When you own a condo you are just responsible for the inside of your unit. The appliances, lighting and plumbing are your responsibility but nearly everything external to your apartment is the condo association’s responsibility. Yes you have to pay your share of the assessments, but a well-run association will have money set aside n their financial reserve to handle routine maintenance and anticipated repairs.
Attorney reviews. Once you decide to buy a home, you are best advised to have a lawyer review everything. When purchasing a condo you need a professional to look over the building’s documents and financial statements to determine if it is well-run.
Utility bills. Many condominium associations pay some of the utilities as a building. Most buildings contract with a cable company which provides residents with free basic cable. Do not expect to receive a water bill. Many larger buildings also provide the heat and air conditioning. A $50 utility bill in the middle of winter will look awfully nice compared to what house owners will be paying.
Control of your home. You may own the condo but that does not that mean you can do whatever you want. Buildings have repair and/or remodeling rules and oftentimes you will need the association’s approval for any projects or renovations.
Pets. Buildings in Chicago have an array of rules when it comes to pets. Almost all have a limit on the number of pets you can have and the type of animals that are allowed. Some have size restrictions such as no dogs over 50 lbs. etc. In extreme cases building do not allow any pets at all.
Rental restrictions. Many buildings limit the total number of units that can be leased at any given time. If there are too many units in the building that are rented vs. owned you will likely have trouble getting a loan. Additionally, there is the risk that investors will not want to spend money to maintain the building properly. On the other hand, a no rentals allowed policy can tie your hands if something comes up and will limit your options. For example if you get transferred at work or need to go home to care for a parent you will not be able to rent your place during that time. With a not rental policy you will either have to sell or make monthly payments on an empty place.
There are differences but these are the important ones. We recommend working with a good Chicago real estate agent who will be aware of the problems that can arise when buying a condo.