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Age-Old Questions
By: Nena Groskind

It may be true that you're only as old as you feel, but community associations are definitely feeling the effects of a population that is aging rapidly and in large numbers. Forty million Americans -nearly 13 percent of the U.S. population - is now 65 or older; that number is expected to double in the next 15 years.

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Buyer Beware

Question: Q: In a condominium sale, who is responsible for assessments that accrue between the signing of the purchase agreement and the closing?

Answer: Q: In a condominium sale, who is responsible for assessments that accrue between the signing of the purchase agreement and the closing?
The rule-of-thumb holds that any assessments imposed before the deed is transferred are the obligation of the seller, Sandy Moskowitz, a shareholder in the Boston law firm Davis, Malm & D’Agostine, P.C., responds. Confusion – and potential disputes – can arise in two circumstances, he says: When a fee is assessed before the closing but payment isn’t due until after; and when the seller is aware that an assessment is coming after the closing (and may even be selling because of it) but doesn’t disclose that information to the buyer.
On the second point (disclosure), Moskowitz points out, while real estate brokers are required to disclose material information to buyers, sellers have no such professional or legal obligation. “If buyers ask, sellers have to respond honestly,” he notes, but they aren’t required to volunteer information if sellers don’t request it. That means “sellers should ask a lot of questions,” he says. “They should insist on the same information about the association’s finances and governance that mortgage lenders request in the questionnaires they ask condominium associations to complete.”
The standard language in a condominium purchase and sale agreement specifies that the seller “has not received notice of any special assessment [and] has no actual knowledge of matters which are likely to increase the common expenses for the unit or result in a special assessment.” The attorneys representing condominium buyers often strengthen that provision by adding language stating that the seller is unaware of assessments “due now or in the future” and has no knowledge of planned or pending repairs or improvements that would result in a special assessment or an increase in common fees. Some also specify that the seller must pay “in full” any assessments due as of the closing date, making it clear that the buyer is responsible for payments due after the closing date. This would include assessments approved before the closing, on which payments are due after that. It would also include phased payments — some due before the closing (for which the seller would be responsible) and some due after, which would be the buyer’s obligation. As a practical matter, Moskowitz says, assessments rarely derail a condominium purchase. The amounts involved are usually small, he notes, and even when assessments are sizable, buyers and sellers typically negotiate their payment well before the closing, incorporating the terms on which they agree in the purchase contract.
The seller might argue that it is the buyer who will benefit from an assessment to finance a new roof, while the buyer may contend that the seller is paying to replace a roof he’s used for the past 10 years. Market conditions will determine who wins that debate, Moskowitz says. In a hot market, the seller might hold firm, knowing there are other buyers in line if this one walks away; in a slower market, he says, if the buyer balks at paying a pending assessment, the seller may not push back.

 
 

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