A condominium is legal formed with documents that governs the condo’s development and policies and to a large degree the overall condo unit owners lifestyle.
Condominium Terms and Descriptions:
Master Deed – Is recorded at the registry of deeds that officially proves that the condominium was legally formed and provides the ability to have separate unit deeds for each unit in the condominium complex.
Declaration of Trust – Is a the legal document created and are filed at the registry of deeds for the condominium.
Bylaws – Are the operating documents that details how the condominium will be run.
Certificate of Master Insurance – All condominium must secure insurance to protect the condominium complex against fire, property damages, personal injury and liability.
HO6 Policy “walls in” coverage – This insurance is required when the master insurance does not cover the replacement of the individual units interior walls and fixtures. The individual unit owners will purchase this insurance separately.
Budget – Each year the condominium association approves the annual income and expense creating a budget that determines the monthly condominium fee that each unit owner must pay.
Reserve account – At least 10% of the total yearly condo fees must be allocated for a special and separate line item within the condo budget and held for long-term maintenance and major repairs.
Condominium questionnaire – Is a set a of questions to be completed by the condo management in order for your mortgage lender to determine if the condominium complex qualifies for mortgage financing.
Condo fees – Is a monthly maintenance fee charged by a condominium complex to cover the cost of repairs, landscaping, or amenities.
Special Assessment – If the condo development does not have a reserve fund set aside for emergency repairs each unit owner will be required to pay with a special assessment fee.