This glossary will provide you with helpful explanations of common terms and documents associated with Massachusetts Condominium transactions.
Board of Trustees: The condominium trust is run by a board of trustees elected by the owners. The board's function is to manage the condominium complex and association. Major decisions are voted on at owners' meetings. Annual general meetings must be held at least once a year to ensure that unit-owners have an opportunity to review the financial statements and discuss any issues in a timely manner.
Condominium: Ownership of a divided interest, i.e., a home ownership arrangement in which the owner has title to a housing unit within a structure, and a proportionate interest in the common grounds.
Condominium documents: The Declaration of Trust, the Master Deed, the Unit Deed, the By-Laws and the most recent Condo Budget Statement.
Condo fees: Condo fees pay for the maintenance and operating expenses of Condos amenities. Most Condo fees include the master insurance policy and exterior maintenance of the building. Some Condos include some or all utilities in the fees while other have the individual owners pay the utilities directly. It may also pay for landscaping, snow removal, cleaning of common areas, pool maintenance, etc. Each unit owner has an undivided interest in the common elements of the building. This ownership interest is often referred to as a “unit factor”. The unit factor for any particular unit will generally be calculated in proportion to the value that the unit has in relation to the total value of all of the units in the condominium corporation. The unit factor will tell you what your ownership percentage is in the common elements and will be used in calculating the monthly fees that you must pay towards their upkeep and renewal.
Condominium Owners Association: Association of the owners of all condominium units in a building that is concerned with managing day-to-day matters in the building complex, including the surrounding and enforcing condominium bylaws.
Condo Reserve Fund: Each condominium association is required to set aside a portion of the condo fees for a reserve fund to pay for major repairs and ensures that the condominium common elements will be maintained in good shape. You do not want to move in your new home only to discover that the reserve fund is under funded and major repairs are required. This could mean a significant increase in condominium fees or the levying of charges, commonly known as special assessments, to the unit owners by the condominium trust to pay for the needed repairs. Special assessment charges can be high depending on the type of work required. Ensure you obtain and review the condominium's financial statements.
Condo Styles: Condos are are found in a variety of styles including high-rise residential buildings (4+ stories), low-rise residential buildings (under four stories), garden style (usually meaning 1 story units), townhouses (individual units with 2 or more floors), row houses, converted multi-families, or even single detached houses. There are even mixed-use condominiums that are partly residential and partly commercial buildings.
6D Certificate: When purchasing a condominium unit, by law a 6D certificate must be issued before you can close. The 6D assures that all condo fees (common area fees) and outstanding special assessments have been paid by the current owner as of the date of closing.
Deeded parking space: A parking space or spaces that are deeded with the unit.
Assigned parking space: Parking spaces owned by the association and assigned to condo owners.