One of the questions I mulled over while preparing the final exam for students in my home inspection class was what percentage of building problems are discovered in the common areas of condominiums during an inspection? Surprisingly, no one knew. Condo buyers and inspectors tend to ignore the common areas of buildings. They’re comfortable pretending these shared spaces don’t exist. It’s a mistake that costs buyers thousands if not tens of thousands of dollars daily in the Chicago area.
Condominium and loft buyers are encouraged not to worry about common element repair budgets in their search for that dream home downtown. Nearly everyone in the market, even a new home inspector, is somehow convinced that the elevators, roof, brickwork, boilers and parking garage are going to be maintenance- and trouble-free during the tenure of a particular owner.
Nothing could be further from the truth. These and other areas are called the “common elements” in a multi-unit building because residents own them in common. Unfortunately, this also means that homeowners share responsibility for any problems in these areas. Our inspectors routinely find that 60 percent or more of all problems discovered during condo inspections involve these elements.
While buyers tend to be much more concerned about their individual units, the reality is that if forced to choose, you might be better off skipping the inspection of the condo unit itself and getting a good look at these common elements.
Go with your home inspector, bring binoculars, and start by examining the exterior skin of the building. Loose mortar at the brick joints, sections as small as a square inch or so of “popped” concrete, are clear, definable signs of trouble.
The Chicago area suffers from a severe “freeze-thaw” cycle throughout the winter. Temperatures fluctuate between freezing and 40 degrees or more, sometimes more than once in the same day. The sun shining on a masonry wall can raise the temperature of that wall above freezing even when the outside temperature is below zero. These extreme temperature shifts stress masonry and eventually lead to its decay; witness the number of older buildings in Chicago’s Loop that lost tiling last winter. In response to this risk to personal safety, the city has developed façade inspection ordinances.
Another good source of information about the state of an older condominium’s infrastructure is the condominium board meeting minutes. These minutes may or may not have information regarding all needed repairs. In addition to board minutes, Illinois recommends condo boards do a capital reserve study as part of each association’s due diligence package. Don’t be embarrassed to ask for this. Simply tell your real estate agent or the seller that you want the board meeting minutes for the past three years and a copy of the capital reserve study that was used for setting the budget for repairs. Or, better yet, request them in writing through your attorney.
The capital reserve study is an attempt by a professional property inspector, architect or engineer to assess common area elements and establish a budget for the needed repairs over a typical 10-year period. These studies are usually revisited every five years. Ask yourself if you can afford your share of the proposed repairs.
In your investigation, you may find that the condo board president or a select committee has been sanctioned to investigate problems. These ad hoc committees then report back directly, sometimes secretly, to the board representative. The results may not be published. If you suspect based on your inspection that there are problems not being dealt with in the minutes, write or speak to the president to ascertain if there are any ad hoc committee investigations or reports. If so, acquire copies and review them.
Over and over I’ve seen the strength of the buyer’s position increase by simply making reasonable requests for information. When you get such information, read it. This shouldn’t take long. These three pieces of information are not part of the disclosure package your agent gives you during the purchase process. You’ll be asking for much more.
What if, in reading the minutes, you find there were rodent issues, environmental issues, developer lawsuits or Chicago city code violations? Find out if they’ve been resolved. Don’t allow these documents to be delivered to you after your inspection and attorney review period. At that point, you can’t do anything. Dig in and demand answers to your questions by a specific date. Or get an extension of the contract review period so that your attorney can act on what you have discovered. Attorneys typically don’t feel they are being paid to review the board minutes or the capital reserve study. You will have to do that footwork yourself, but your attorney will help you act on the findings.
As professional licensed home inspectors, most of us know that the real problem in condo and loft living is in the common areas, but our hands get tied. We hear seller’s representatives say, “Why would you ever want to see the roof? I’ve never heard of an inspector looking at a highrise roof. This is ridiculous.” Since many inspectors get their work from real estate agents, they tend to back down. When sellers’ representatives get defensive, that’s your signal to turn over the rock. Something that threatens your pocket book may be hiding under it.
To protect your interest, arrange – no, insist – beforehand on complete access and a guided tour from the building engineer. Investigate all of the common areas. Look at them with your inspector. Don’t forget that if your inspector isn’t interested in looking at the common areas, he or she may be part of the problem, not the solution.
Thomas Corbett is president of Tomacor, www.Tomacor.com, a professional property consulting company specializing in commercial and residential property inspections and expert witness work. Questions can be emailed to TCorbett@Tomacor.com.