Arizona is one of the top condo markets in the U.S., with many people choosing to live in a condo either as a primary or vacation residence. If you are thinking about buying an Arizona condo, here are some things you need to do before you make that purchase:
Review condo rules — Many condominium developments are governed by a homeowners association, which requires owners to follow certain rules concerning the use of the condo and the community’s amenities. Condos in Arizona are governed by the Arizona Condominium Act, which regulates how they are treated as real property. When you buy a condo in Arizona, you own your individual unit but also have what is known as an “undivided interest” in all the common areas, such as the pool, parking garage, tennis courts, etc. You are required to abide by the rules and regulations as established by the condominium complex as one part of a community of condo owners. There may be a number of restrictions on guests, pets, vehicles, rentals, etc., that you need to know about before you buy your condo.
Owners vs. renters — You may find it hard to get a mortgage or resell your unit if the condominium community has a high percentage of renters vs. owners.
Special assessments — Ask to review the condominium association’s current and future budgets to determine if there are any special assessments that are scheduled to be levied for improvements or maintenance.
Legal issues — Find out if the condominium association is currently involved in any legal disputes with homeowners, developers, or suppliers.
Tax treatment — As a condo owner, you are responsible for paying property taxes on your unit, which provides you with a tax deduction. Most condominium complexes also assess monthly dues that go to pay for the overall maintenance of the complex, which is not deductible.
Deed transfer — Unless you pay the full purchase price upfront, you will be responsible for obtaining a mortgage. When you sell your condo, you transfer ownership in the same way you would if you sold a house — by a real estate deed.
When you are making an investment in an Arizona condominium, it is always wise to seek legal counsel to review the covenants, conditions, and restrictions (CC&Rs) that come with condo ownership. Condos may also carry restrictions against pets or renting out the property.
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