property management companies

If you choose to purchase a condo or townhome, you will likely have to deal with the condo association’s property management company before closing on your condo or townhome. Not every condo association uses a property management company. For those condo associations that do use a property management company, expect the following:

• Whenever a condo or townhome is sold, the seller is required to have a seller’s certificate filled out by the property management company. According to Kentucky Law, the property management company can charge up to 85% of the HOA fee for the completion of the certificate. For example, $320 per month HOA fee could generate a fee as high as $272 to the management company.  This certificate must be completed within ten days of the request. Typically, they will not take a credit card. You can mail in the check, but you lose part of the ten days the buyer has given you to fill out the certificate. It is pretty common to hand deliver the check. 
• For those obtaining a loan, the mortgage institution will likely have their own form of a Seller’s certificate more commonly referred to by lenders as a Condo Questionnaire. Property management companies will typically charge the buyer/buyer’s lender $150 for completing this form. Examples of questions asked in the questionnaire include: How many people are behind in their dues? How many investors are condo owners? Is the development completed? These questions are based in part on Fannie Mae requirements.
• Prior to closing, the title company will need to know information regarding the homeowner’s dues owed for proration purposes. Specifically, the title company will need to know if the homeowner’s dues have been paid and what date the dues are paid through. Unfortunately, some property management companies will refuse to answer these questions and require the title company to go through a website called Homewise. Homewise sets its fees upon their relationship with the management companies.  Ironically, this information has to come from the management companies. As you total this up, you can see a real estate sale is pretty lucrative to the management companies.
• If there is a repair request from the home inspection, the management company may accept the report but not give an answer until the board meets and they can bring the matter before the entire board.  A normal repair request will require an answer two to three days to know if the repairs will be performed or not.

For more information regarding this information, call the Hollinden Team at 502-429-3866.