Renters who want high end appliances without the corporate trappings of luxury landlords have recently turned to renting condominiums from private owners as an alternative. Other condo renters are seeking a more mature living environment away from the stereotypical rowdy young renters that live in traditional apartment buildings. Rented condos can offer them the fixtures and styling normally offered only to homeowners without the long term commitment and up front cost of a down payment and mortgage.
However, condos have their own unique problems that can make renting them a challenge. Unlike standard rentals which are usually run by experienced property managers, condo buildings are collectively owned by the residents. These residents may or may not have experience in taking care of big structures like multi-unit buildings. Like many situations where a businesses are run by volunteer committees, organization and communication within a condo building can be limited. I know that in-unit washer and dryer looks pretty sweet, but before you jump into renting a condo here are some questions you should ask of the agent, landlord or manager.
1. Is the landlord current on their assessments?
Owners of condominiums must pay into a general fund managed by the condo association, used for the upkeep of the common areas and exterior of the building. It's just like rent, but it's called an assessment. In some cases these assessments even cover utilities like heat and water. If your landlord isn't paid up on his assessments, he can be evicted by the association, and you'll go right along with him.
2. Does the association even allow rentals?
We covered the issue of condos that ban rentals in depth in “The Mysterious Affair at Skokie” a few weeks ago. But it bears repeating: condominiums can ban rentals in their bylaws. While owners can petition the board for an exception, they are normally only granted in cases of extreme financial hardship – in other words, the landlord either rents out the place or they wind up in foreclosure.
Under Illinois law, you're supposed to receive a copy of the association's bylaws with your lease. However, many condo owners “forget” to provide them. Besides, if you're already at the point of signing a lease it's a little late to find out that rentals aren't permitted. Check before you apply. (Note: RentConfident includes this check in our Signature Reports.)
3. Do the residents view renters as second-class citizens?
Some condo owners get pretty snobby when it comes to renters in the building. Their reasons are many, and most of them are bogus, but regardless of the cause you don't want to be living in a building where the residents see your presence as a problem. This is even more important in buildings that offer common area amenities like pools and gyms, as some only allow owners to use these facilities.
Note that landlords and agents will probably not tell you if the other owners have problems with renters. You'll want to ask around yourself – talk to any neighbors you see while at the showing to get a feel for their attitude. You can also ask for copies of the recent meeting minutes from association meetings to get an idea of how the residents are responding to the rental of a unit in their building.
4. Does the association charge any fees or deposits to renters?
You probably expect your landlord to charge you a few up front fees along with your security deposit. But the association may also charge you for the privilege of moving in – and moving out! I have seen fees in excess of $1000 just to move into some of the condo buildings in Chicago. Make sure that you get a list of all the up front costs before you apply. (Note: RentConfident includes this check in our Signature Reports.)
5. Does the association have a property manager or do the residents handle maintenance themselves?
Full time property managers of apartment buildings are notorious for being slow to respond to maintenance requests. Now take their responsibilities and pile it on top of a condo association that's run by volunteers. You can see where problems may arise. The association as a group is responsible for maintaining things like hallways, fences, yards and parking lots, along with the exterior of the building including the roof, walls and porches.
If you find out that the association is self-managed, give a good hard look to the job they're doing. If you find out that they have a property manager, do some digging into the manager's reputation. You probably won't be able to interact directly with the association or their manager – doing so will be your landlord's responsibility – but your research will help you manage your expectations better and, if necessary, run away. (Note: RentConfident includes this check in our Signature Reports.)
6. Does the association have any bizarre rules?
As I mentioned above, your landlord is supposed to provide you with a copy of the condo association's bylaws along with your lease, but many “forget” to do so. You really need to look these over. Some associations will ban very strange things – or common but unexpected things, like Christmas wreaths or political signage. Others will go so far as to dictate what colors you can use for window treatments and flowers in your yard. One building I visited with a previous client required all occupants to allow bedbug-sniffing dogs into their units every two months!
Most associations will fine your landlord if you break any of their rules, regardless of if you know about them or not. Those fines are in most cases billed back to you.
7. What items in the apartment are limited common?
In a condo building there are three types of property. Common elements are owned and maintained by everyone, and can be used by everyone. Some normal common elements would include the roof, the sidewalks and the elevator. Limited common elements are owned and maintained by everyone, but can only be used by individual residents. These can include balconies, parking spaces and windows. Finally, there's the air space and wall surfaces inside the individual condos, which is all each unit owner actually “owns” outright.
When you break something within your condo, you will be working directly with your landlord to get it repaired. But if you break something in a common or limited common area, your landlord will have to work through the association to get it fixed, which may result in delays or higher costs.
8. How many units in the building are rented?
If this is the only rental in the building, make sure that the association has had renters in there before. If the building has a lot of renters – especially if over half of the building is rented out – the association may be having financial trouble. A bankrupt association may have trouble maintaining common areas and keeping the water turned on.
9. How many owners has the association evicted recently? How many are in foreclosure?
A high number of evicted owners or foreclosed owners is another red flag indicating that the association may be running short on funds. (Note: RentConfident includes this check in our Signature Reports.)
10. How experienced is your landlord? Is this a business or a stopgap source of income?
Some condo owners that turn landlord are doing so because they've bought a new place and can't sell the old one at a profit. They may be planning to sell the unit once the market improves, or hold on to it for a long time. They may have experience as a landlord or they could be rank newbies. In other cases, experienced landlords have bought up blocks of condos to rent out as part of their normal portfolio.
There are no right or wrong answers to any of these questions. Each renter will have a different level of acceptable risk. Someone who never leaves the house and wants some privacy might be happy in a building with a struggling association. Someone who really wants to live in a building with a lot of curb appeal might be okay with strict rules about what color flowers they can plant on their balcony. What's important is that you only go into a condo rental situation if you already know what you're moving into.
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