Understanding the Forms of Ownership in a Condominium Closing:
- Fee Simple refers to the interior of the condo unit/home. Fee Simple title is defined as “a permanent and absolute tenure in land with freedom to dispose of it at will”. Land in this case would be the walls in of the condo unit itself.
- Limited Common Elements (LCE) refer to the portion of the common elements for the building that are specifically designed for the exclusive right to use by the condo unit Examples include parking and storage.
- General Common Elements (GCE) refer to the portion of the building, land, etc. for the use of all unit Examples include the gym, dog park, lobby, elevator, hallways, etc. Each unit owner has an undivided percentage interest in these areas.
Understanding the Exclusive Right to Use an LCE:
Many condo declarations allow the unit owner to transfer the exclusive right to use the LCE appurtenant to their unit, to another unit. If this is allowed, there are necessary steps to ensure that the paper trail matches the intent.
- Some associations handle parking and storage assignments directly, and transfer documents do not need to be filed with the county.
- If an LCE will not be conveyed with the current sale, a transfer of that exclusive right must be filed at or prior to Once the seller has sold the condo, if proper paperwork was not filed to transfer the LCE to another unit, the LCE will remain as an appurtenance to the sold condo unit.
- If the seller sold their exclusive right to use a limited common element but did not file the proper paperwork in the public records, corrective documents need to be filed before
- Check with your Heritage Title escrow team about which LCE is attached to the unit being sold.
Understanding HOA Fees:
HOA Dues – The monthly assessment each owner pays to maintain the association’s monthly budget and expenses.
Working Capital – A deposit each new homeowner makes into the association for operational expenses.
Capital Reserves – A deposit each new homeowner makes into the association, to be used for future improvements or maintenance.
Special Assessments – An assessment to all units for the purpose of defraying, in whole or in part, common expenses not anticipated by the annual budget or reserve funds.
Be sure to check your resale certificate carefully and reach out to the HOA with any questions regarding applicable HOA fees.
HOA Dues, Working Capital, Capital Reserves, Special Assessments, Violations, and Pending Lawsuitswill all appear on the resale certificate from the HOA.