Condominium Information & Resources

Frequently Asked Questions

1. What Are Association Dues?
   This is money paid to the association (monthly, quarterly, annually, etc) to cover expenses paid by the association. Each association is structured differently, however, dues usually cover snow removal, landscaping maintenance, structure repair/maintenance, management fees, common area (pools, tennis courts, play areas, clubhouse, etc. - if applicable) and other expenses. Ask the sales person or association what is covered with the dues.
2. What Is A Buy-In-Fee?
   This is typically a one-time non refundable fee paid to the association at closing to be deposited into the association’s reserve fund for future improvements.
3. What Is A Reserve Fund?
   A reserve fund is money set aside for large, expensive projects such as roads, roofs, renovations, replacement of common elements, etc. If the reserve fund is not able to cover the total expense of a project, the association will get the required fund via a special assessment from the homeowners. Typically the minimum amount a reserve fund must maintain is 10% of the annual budget.
4. Who Manages The Association?
   This depends upon the association. Some associations are managed by a management company for a fee and others are managed by the residents with direction from the Board of Directors.
5. What Are Association By-Laws, Covenants & Restrictions?
   By-Laws, Covenants & Restrictions are the rules and regulations for the association and the owners. It is basically a list of the do’s and don’ts and rights of an owner. It states how the association is structured and the responsibilities of the association.
6. How Are Property Taxes & Utility Bills Handled?
   This answer will depend upon how the association is structured. Please verify this information before purchasing a condominium. The owner may receive individual bills from the utility companies based upon usage or this may be included in the association dues. Usually property taxes are billed directly to the condo owner by the taxing authority, but they may be included in the association dues.
7. How Is Insurance Handled?
   Each condominium association is unique and it depends on how the association was structured. Homeowner insurance may be included in the association dues, owners may be billed individually by the association, each owner may need to purchase their own coverage and list the association as the additional insured. It is best to find out the answer to this question before the purchase to determine what is provided by the association & what the owner needs to provide for the structure, contents & liability. Condo insurance for the interior is slightly more than renter’s insurance.

Resources

• State of Michigan Condominium Buyers’ Handbook

• Purchasing a Condominium
  • Home Buyer's Information Center
  • Allspect

• Condominium Association Questions

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