Questions to Ask When Buying a Townhouse

Homeowners' Association

• If the townhouse is part of a complex or community of townhouses, ask if there is a homeowners' association or a management group and what the monthly fee is to the association or group. Also ask what the fee includes---maintenance of the complex, repairs to units---and what other add-ons you are getting for paying the fee.

  Note that you will receive information about the homeowners' association as part of your townhouse's master deed and covenants documents.

Parking and Garage/Carport Rules

• Ask what the parking rules are and if each townhouse includes its own garage or carport. Also ask if there is a fee for parking and where guests will park.

Overall Complex Rules

• Inquire about the complex or community's overall rules regarding pets, subleasing the property, clubhouse rules and policies, storage spaces, porch and deck usage and if you can perform exterior and interior renovations on your unit. Also, ask to see the rules in writing before signing any documents.

Maintenance Issues

• Ask how much money is devoted to maintenance and if a capital reserve account is maintained within the homeowners' association or management groups operating the complex. Ask to see a copy of the association or management group's annual revenue budget to see the capital reserve account's exact balance.

Improvements, Special Assessments, Taxes and Legal Issues

• In addition to asking about the complex's capital reserve account, ask if there are any current improvements being made to the complex, future improvements and who is funding the projects---the residents through special assessments, one-time fees for capital improvements or from another funding source.

  Inquire about state and local property taxes and the average yearly tax amount. Also ask if the complex is currently in any pending legal actions with residents, homeowners' association or management group members or outside individuals or properties.

Owner vs. Renter Rate and Fee Delinquency Rate

• Find out the number of people who own their townhouses within the complex and the number who rent. Renters may affect your ability to sell your unit later and may add unwanted noise to the complex.

  Also, find out the townhouse complex's fee delinquency rate--the number or percentage of owners or renters who are not paying the homeowners' association or management group fee. A high rate can signal a financial problem for the complex.

Insurance

• Find out what the complex's or homeowners' association or management group's master insurance policy covers, who the provider is, if fidelity insurance is part of the policy to protect against embezzlement, and to see the policy's by-laws. You also will want to purchase your own individual insurance policy. Ask for suggestions on insurance carriers if you are not sure.

Doing Due Diligence

• Before signing the purchasing agreement and any other contracts or forms, do your due diligence. Ask questions and perform background checks on the townhouse and its deed history. Do not go into the buying process blindly, and do not assume anything.