New Jersey condo associations must now fund larger reserves and conduct engineering studies, often triggering special assessments. Scott Selleck walks through how Jay and his wife discovered a hidden $100,000 assessment on their Edgewater condo by reviewing financials during the attorney-review period, then negotiated the seller to cover it at closing.
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Owners are getting hit with special assessments from $15,000 to $130,000 assessments. Hi, this is Scott Selleck from Keller Williams City Views Realty. Jay and his wife ultimately purchased in Edgewater, New Jersey, along the riverfront. This is a different time now we're in now with the law changes regarding condo association, homeowners association management being responsible for getting the engineering studies done for the capital improvements of these buildings. And making sure that there is a plan in place and that there's proper reserves. A lot of these associations now require not just 10% capital reserves. So it's extremely important to work with a realtor that understands the dynamics of how to do the due diligence during attorney review and also throughout the negotiations, especially during the negotiations before you even get into attorney review. If you don't do that, The buyer is at risk of potentially inheriting significant issues afterwards and payments. So before you get out of attorney review, or during attorney review, that's the most time, the strongest lever that buyer has to getting a clear picture of what's going on with the association, negotiating with the seller to pay all of it, any kind of capital improvements assessments which are current and also future planned or, or walking away if it's just too daunting. So Jay and I worked great together. We got financials during the offer, first 2 years, full years of financials. We got the current budget. We got 6 months of minutes for the meetings and why that's important during a review, because during those monthly HOA meetings is when projects are discussed, future projects that are needed for the association. Now and projected out to the future. So that's basically the exposure going forward. The complex that we were ultimately made offers on had something very interesting. It had what's called closed-end minute meeting policy, basically saying that even during attorney review, association management did not have to turn over those, those minutes. It did say that if someone wanted to go to their office to review the minutes in their office, They can do that. Jay was not the average buyer. He's extremely information-oriented. Him and his wife asked great questions through the process. He went to the management office. He basically went through everything and what he uncovered was fascinating. What we thought was a $30,000, $40,000 assessment turned out to be a $100,000 assessment over the time for the next wave of work that was coming to this complex. It was a game changer because what we ended up ultimately doing with his attorney, Charles— Charles has over 35 years experience in law and real estate. I bring 34 years together, close to 70 years. And then you have Jay coming in with his highly analytical, brilliant, going through all the financials, the bylaws, the capital improvements and a budget. And what he was able to do is basically negotiate a fair, large sum payment at the closing towards the assessments. He got his lender to agree and the association to agree that seller would pay that credit directly at the closing. So his next 5 years living there in that complex has no capital improvement assessment, which was huge. When you're working through a transaction like this and you have a keen awareness how important this is, you don't want to have your client put at risk. There's only one way to do it, and it's do it the right way. And we worked as a great team and we closed on the sale 3 weeks ago. They're thrilled. They're going through renovations right now in the apartment. They're actually using my handyman contractor who's licensed to do the work. They're gonna use my cleaning person. So the sale just doesn't stop even when we get to the closing. They're friends for life and they're, uh, gonna have the work done with a credible person. I don't get paid for any of that afterwards. It's just goodwill and for me to add value. So this is the type of transaction I do best, then I created a blog and the link is below with the blog. So feel free to like the video if you like it. If you have questions about purchasing a condo or co-op from Weehawken all the way up through Fort Lee, just give me a call. Scott Selleck, Keller Williams City Realty, 201-970-3960. Scott Selleck, I would always have your back and you learn a lot along the way. You'll question everything and when you're done, you'll have peace of mind that you were covered
