On condo ownership, property taxes, etc.

We’ve been proud owners of our condo for over two years. I read many books on what to expect when buying a condo, and none of them prepared us for the stuff we’ve had to encounter lately. Thank God Gator is around to help us through this. It all makes my head spin.

As I’m a stand-up guy who always looks out for others, here are some key things we’ve learned along the way that might help when looking to buy a condo in Cook County – specifically one in a new development.

(Disclaimer: I’m not an expert at all. This is just stuff we’ve experienced and learned along the way.)

  • Be vigilant. Especially in the first year of ownership, when warranties for craftsmanship still hold. Get things fixed as soon as you notice them. Call the developer directly. Be a pain in the butt. If you aren’t pleased with how they fix something, make them do it again. We noticed a weak floorboard in our living room when we first moved in, and just last week it cracked and sunk into the floor. If we had simply gotten it fixed last year, it would have cost us nothing. But now, we’re most likely responsible.
  • If you are moving into a new development, ensure that you have electric meters. If not, it’s a major pain to get an accurate electric bill — or get slapped with a HUGE bill for all the electricity you used but weren’t billed for previously.
  • Contact your county courthouse to ensure you have a property tax PIN (Property Index Number) assigned to your unit. You can also search for this online here. If you don’t, you might not get your property tax bill in time, as it will be sent to one general address in your building – which could result in it being lost.
  • When you get your property tax bill, and you’ve lived in your condo for a year (and it’s your primary residence), make sure you have a homeowner’s exemption applied to it. It can be big savings. If it says “0” in the homeowners exemption line of your property tax bill, you need to go to a Cook County Assessors Office and prove you’ve lived there for a year. To prove this, you will need a valid state-issued ID with your current address, a voter’s registration card with your current address, or a phone bill from the beginning of the property tax bill year (i.e. this year, we had to present a phone bill from Jan 1, 2007). If you don’t have one of these things, you’re outta luck.
  • Don’t pay your property tax bill! This is most likely the responsibility of your mortgage company. Even if you haven’t put money into an escrow account because of the complexities with buying in a new development with no parceled property tax history, it’s still the mortgage company’s responsibility (most likely – to verify this, call your mortgage company!). You will then pay your mortgage company, and going forward, they will now have the information to properly set up your escrow into your monthly mortgage payments.
  • Set up a savings account dedicated to your condo the day you move in, if not sooner. Put money in it with every paycheck. This will save you when you get that first property tax bill, or you need to fix something down the road.
  • Read that big bound book of rules and bylaws and such provided to you upon closing. It will help you down the road.
  • Turning over the association from the developer to the owner. This is where we’re at. There are so many elements to this, it would take pages to explain. And how they all fit together, what comes first, who kicks it all off is just a mystery. Thankfully, Gator has been instrumental in leading this effort. Basically, once your building is occupied by a certain percentage of owners, the board can be turned over to the owners. Read those bylaws to verify this – I’m sure it can vary. Once you’ve confirmed this, you need to contact a good lawyer who specializes in working with condos and associations to help the board negotiate all the pitfalls and nuances involved in getting a new board started correctly and getting an association turned over to that board. This is the tricky part, since there isn’t a board to help make this decision. Then, get a board elected through a voting process, meet with the developer to have the financials and documentation turned over to the board, hire that lawyer who helped you, hire a management company (do your research! There are several out there. Here’s a sample list. If your condo building is small enough, you might not need one.), and review the financials to ensure the money is being managed correctly. Whew! I’m sure I’ve missed many things. Essentially – it’s complex. But getting that lawyer is key, I say.

Hope this helps. I’m sure we’ve got a butt-load more to learn.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s