When purchasing a condominium, a buyer needs to have adequate time to go over any related documentation to make an informed decision before making their purchase or signing off on the purchase agreement. This is where a Condominium Association Addendum for a Purchase Agreement comes in.
What is a Condominium Association Addendum?
When a property being sold is part of a condo association, it is the seller’s responsibility to provide the buyer with a Condominium Association Addendum, which will include the bylaws, regulations, rules, and any other important agreements related to the property for the buyer to review. It is an additional document that is added to the original sales and purchase agreement that goes over any additional details and requests that were not included in the original agreement.
What is a Condominium Association Addendum for a Purchase Agreement?
The purpose of this addendum is to allow the buyer of the condominium a specified period to go over any documentation for the condominium that has been provided by the seller. This is usually a time frame of 5 business days, at the least.
The addendum allows the buyer to opt-out of the sale should they not approve of the services, fees, or if market conditions are not good. As long as written notice is given within the specified time period, the buyer will get back any deposits or earnest money in full.
How to Create a Condominium Association Addendum for a Purchase Agreement
Each addendum will differ from one condominium association to the next. However, there are some key things that need to be in the addendum for a purchase agreement.
This area is used to outline identifying facts that are needed for the terms to be properly applied. You will need:
- The date of the purchase agreement
- The full name of the buyer
- The full name of the seller
- The full address of the condominium
- The condominium association fees and what they cover
- A list of the condo documentation that will be provided
After outlining the details of the buyer, seller, and property, you will next need to outline the conditions that must be met while living in the condo. First, a date that the seller must supply the defined items to the buyer must be given. Next, you must list the documents that will be provided to the seller. This should include the Board of Directors Meeting documentation.
Next, you should state how many days the buyer has to review the documentation. An amount for the condominium association fees should be included, as well as how often they are to be paid. You will also need to list what services the fees cover. Lastly, the terms of the addendum will need to be verified with both parties’ signatures, along with the date.
How to Use a Condominium Association Addendum for a Purchase Agreement
Before writing up any addendums, you should first review the original purchase agreement. This will give you a basis on what you will need to include as you draft the addendum. Remember, the core elements of the addendum are:
- The Purchase Agreement Effective Date
- The name of the buyer
- The name of the seller
- The physical address of the property
- The precise changes/additions being made to the original agreement
Once this is done, you can present it to the buyer for their review. This is where alterations to the addendum can be made should both parties not agree to the terms. If both parties do agree, they simply sign and date the document to make it official and binding.
Condominium Association Documentation
There are several documents that a buyer must be provided with before signing a purchase agreement.
The condominium declaration usually holds precedence over other rules and regulations documents. It states the creation of the condominium, and what defines it. It outlines who the unit.owners are and how much of a percentage of interest they have. It also outlines:
- All common area rights
- How maintenance is handled by the association
- How assessments are used by the board of directors
The bylaws outline the associations day to day operations and define:
- Who the members of the association are
- How and when the board of directors is elected by these members
- When member meetings will occur
- Who is allowed to vote
- What the legal requirements are for a quorum
- What the role of the board members are
- Outline of the maintenance fund
Condominium Associations Rules and Regulations
This document acts as a guideline for condo owners to follow. It applies to both tenants and their guests. It typically includes rules regarding pets, holiday decorations, what is required to install a satellite dish, where guests may park, etc.
Violation of Bylaws, Regulations, and Rules
When you purchase a condo in a condominium association, and you have signed off on their addendums (the above documents), you agree to abide by the rules and regulations that they have set out. When you breach these rules, the association can take action against you in a number of ways, such as:
- Charging you a fine
- Entering your unit or removing a structure that violates the rules, at the expense of the owner
- Engaging in legal proceedings in order to rectify the violation, at the expense of the owner
- Terminate your right to own the unit, which can result in the association selling the unit with no prior warning
Frequently Asked Questions
An addendum should, and the contract should supplement each other. However, if there is a conflict between the addendum and the contract, the addendum supersedes the contract.
Yes, sellers and their agents are required to disclose these documents before the buyer signs the contract
Yes, it must be signed by all parties in order to be legally binding.