In my previous articles, I have discussed two facets of condominium unit sales. First, that a seller must disclose all knowledge as to their unit’s condition, and second, that it is impossible for a seller of a condo unit to be fully aware of his building’s condition, especially a decades old high-rise waterfront building. These articles prompted a question by a Realtor I consider highly perceptive about where that leaves the industry: “What can we, as Realtors, tell a buyer, she asked.” How should a Realtor represent a seller of high rise condo unit if the client must tell the buyer all he knows despite knowing very little?
Remember that the word “unit” really has two meanings. The first is the meaning in most declarations, the space within the horizontal and vertical walls of the owner’s dwelling. In other words, what one can see when he walks into a unit. This typically includes the paint on the walls, the carpet, the ceiling, and all the space between. Disclosing what the owner knows about that space could be fairly simple and wouldn’t take long at all.
However, the more complete definition of “unit” is that it also includes an undivided interest, jointly with all other owners, in all the rest of the building. Everything that holds together the more simplistic space one might live in. Those other parts are complicated and it’s those parts that I have suggested are seldom fully understood by most owners.
Now to the question: What is a Realtor to disclose when a unit is the subject of the sale? First, remember that he (the Realtor, who often is a “she”, but please permit me to follow the writer’s prerogative of using the gender of the writer, so we don’t go through the awkward he/she drill), will have lots of help, if he will but use it”). PLEASE, PLEASE, PLEASE, tell the buyer to find a lawyer experienced in condominium associations. (Not just closings, because often a closing lawyer will have had very little involvement in “condo wars”). That lawyer will take the responsibility with your buyer in deciding what documents to compile. A Realtor can assist the seller by starting right away when he signs a listing to gather documents that he already knows the buyer will need. Make a book of those documents. Give to the buyer when you present a contract. The law will tell you only the beginning. You need the declarations and all the rules of the association, of course, but you will also need the minutes of the last several years’ board meetings, any reports from engineers that are mentioned in the minutes, legal opinions of the association’s counsel, budgets of the last several years, and audit reports of both reserves and any special assessments. All this will take time to assemble, but you can save time by getting it together.
Since you know what the buyer will need before he asks, save time. Treat your buyer like you’d like to be treated.
To answer the question, what should a truly professional Realtor tell or tell the seller to disclose to a buyer? What he knows, certainly. But as a Realtor you insert yourself as a guarantor of condition of something out of your world when you, or mostly your seller, represent the condition of a building. Get the documents. Don’t leave out stuff that needs to be presented for the buyer to understand what he’s buying.
Finally, don’t be afraid of a condominium. Good people own them and need to sell. Good people want to buy. You do a professional service if you understand that the Champlain Condominium in Sunrise, Florida was a bad building, probably badly designed and badly built. Maybe badly located. But you serve your clients well by making the necessary information available to tell the good from the bad.