Congratulations on you’re first year as a homeowner!
After a year in your new home, you’ve likely begun to settle in. However, the job of a homeowner is never truly complete. Now is the time to turn your attention to actions that will ensure your home remains a wise and secure investment.
This blog identifies ten crucial steps to consider after your first year of homeownership. The first is to review your home inspection report, addressing the replacements and upgrades that, while not urgent at the start, may be now significant.
Next, consider the importance of estate planning to protect your family’s financial future, evaluating your mortgage and homeowners insurance for proper rates and coverages, and checking city and county public records for unexpected changes.
Read on as we delve into these topics and more, guiding you through this crucial phase of homeownership!
Review Inspection Report For Recommendations
Reviewing your home inspection report one year after your closing is a proactive strategy to prevent minor issues from becoming major problems. The inspection report identified recommendations for replacements or upgrades that, while not urgent at the time, may currently be necessary.
For example, your inspection report may have stated the furnance is “presently working but budget for replacement in the future”. Now, the aging furnace is beyond it’s useful life. Replacement is no longer a recommendation; it’s safety concern that should be addressed to prevent the system from breaking down in the middle of winter leaving your home frigid. Similarly, central AC breaking down-mid summer can cause the home to be at above 90 degrees in a heat wave. Substantial risks particularly to small children.
Delay in handling recommendations from the inspection report could result in heightened expenses. A fix may have been minor and cost-effective if timely handled, but the delay results in great repair costs (think water damage/mold if you didn’t replace a roof or plumbing). Minor cracks in a foundation can expanded if not properly sealed
Ignoring sugested electrical repairs can result in loss of critical services, such as security systems, internet, and lighting. In the era of workinig from home, loss of these services could create employment issues.
Real estate is an expensive asset. It is vital to have a plan in place as to how this asset is handled in case of death, incapacity, or inability to make decisions.
Planning ahead will allow for your families best interests to be put paramount if one of these unfortunate events strike (after which it is too late to estate plan).
A will, perhaps the most common estate planning document, details how you want your assets, including your home, distributed and who is responsbile for distribution after death. A will is essential for the following reasons:
- Choose Your Heirs (Don’t Allow State Law to Decide): Property is distributed by general state laws without a will – the beneficiaries of your property may not align with your wishes.
- Maintain Harmonious Family Relationships: Clear intentions set in a will prevent disagreements as to how you desired your assets to be distributed.
- Choose a Trustworthy and Competent Estate Administrator: The court appoints one person to manage an estate. Courts will follow your choice of administators in a will. If you did not have a will, any persons and/or family members could petition to be the administrator (even those that would not have been your choice) resulting damaged relationships or legal disputes.
- Swift Property Transfer: Transfer of real estate ownership will be delayed without a will due to a longer probate process, resulting in problems if no person has authority to make decisions.
- Reduce Legal Costs: Estate administration without a will involves more legal work and higher legal fees.
- Increase Family Wealth with Tax Benefits: Estate planning allows for maximizing tax benefits to preserve family wealth.
- Choose a Guardian For Children: Appoint a guardian for your minor children in case of your death. Otherwise, it is for the courts to decide.
A power of attorney (“POA”) allows you to appoint someone to handle your legal and financial affairs if you become incapacitated.
Contrary to some beliefs, a power of attorney is needed even for spouses to make decisions on each other’s behalf. If one person becomes incapacitated without a power of attorney in place, the only option then for obtaining decisionmaking authority opening a litigation for legal guardianship.
A power of attorney for real estate offers several benefits in the event you are no longer able to make decisions:
- Property Management: POA would allow the person you trust to handle property affairs, pay property taxes, manag mortgages or loans, and accept rental income.
- Real Estate Transaction Decisions: A POA can act on your behalf in buying, selling, transferring and refinancing real estate.
- Efficiency and Convenience: Even if you are not fully incapacitated, a POA can step in and assist you if ownership becomes challenging due to health, age, distance, or other commitments.
- Legal Decisions: A POA can make decisions regarding tax matters, disputes, or legal issues involving the property.
Need assistance in preparing these important estate planning documents?
Our firm provides comprehensive guidance to ensure your estate planning goals and needs are thoroughly addressed and achieved. Call/text us at 201-389-8275 or e-mail email@example.com visit the Contact Us assistance with any estate planning.
Evaluate Homeowners Insurance
Homeowners insurance is critical for protecting your investment. Now that it has been a year since you closed on the home, it is time for a thorough review of the policy to ensure it is meeting your needs, provides sufficient coverage.
Why should you evaluate your homeowners insurance at the 1-year mark?
- Changing Neighborhood Values. Real estate values in your neighbrhood may increase year to year. For example, homeowners in a rapidly developing or popular area may find skyrocketing property value. An insurance policy that only covers the previous lower value leaves you underinsured and at risk of huge loss if there is substantial destruction.
- Home Renovations or Improvements. Have you remodeled your kitchen, added a new deck, or upgraded your security system? Improvements increase your home’s value, requiring an increased coverage.
- Changing Items Inside Your Home. Homeowners insurance policy typically include coverage for your personal belongings within the home, including furniture, clothing, and appliances. The value of the belongings (and thus the necessary coverage) may increase if items enter your home such as artwork, jewerly, and electronics.
- Available Discounts and Offers. Insurance companies often offer new discounts.modify their discounts or offer new ones. Discounts may include multi-policy discounts (bundling home and auto insurance), safety feature discounts (when you installed protective devices like security systems, smoke detectors, or storm shutters), claim-free discounts (when you haven’t made claims recently), loyalty discounts (rfor long-term customers), and discounts for customers who upgraded their homes to be disaster resistant.
Here are the key steps to take when evaluating your policy.
- Review Policy Details. Sit down and read through your policy. Check the limits, deductibles, and coverages. Make sure it accurately reflects your present situation.
- Deductible: An insurance deductible is the amount of money that you, the policyholder, must pay out-of-pocket towards a claim before your insurance coverage kicks in.
- Limit: An insurance limit is the maximum amount of money that an insurance company agrees to pay for a covered loss or damage under your policy.
- Types of Coverage: Here are examples of types of coverages to consider:
- Dwelling Coverage: This covers damage to the physical structure of your home, such as the walls, roof, and foundation.
- Personal Property Coverage: This covers your belongings inside your home—like furniture, appliances, clothing, etc.— if they get damaged or stolen.
- Other Structures Coverage: This covers structures on your property not attached to your house, such as a detached garage, shed, or fence.
- Liability Coverage: This protects you from legal and medical costs if someone gets injured on your property.
- Additional Living Expenses (ALE) or Loss of Use: This helps pay for temporary living costs if you need to live elsewhere while your home is being rebuilt or repaired.
- Medical Payments Coverage: This covers medical expenses for guests who might be injured on your property, regardless of who is at fault.
- Conduct a Home Inventory. Take a catalogue of the goods in your home. Compare this list against your policy to ensure sufficient coverage.
- Assess Any Home Improvements. Consider any renovations or improvements made to your home. Did you notify your insurance company about them? If not, it’s time to inform them to avoid being underinsured.
- Shop Around for Better Rates. Don’t hesitate to compare rates with other companies to ensure you are getting the best deal. Make sure you compare apples to apples – the coverages, deductibles, and limits should be aligned.
- Consult with Your Insurance Agent. Lastly, utilize your agent as an information resource. They can answer questions, clarify doubts and help ensure your coverage is adequate.
Evaluate Mortgage Terms
Mortgages are not a “set it and forget it” aspect of owning real estate and should be evaluated on a yearly basis. Reviewing your mortgage can unlock financial benefits, including potential opportunities for refinancing, leveraging home equity lines of credit (HELOC), preparing for home sale, or even uncovering errors or opportunities for savings.
Let’s delve deeper into why you should evaluate your mortgage:
- Refinancing: Refinancing a mortgage involves obtaining a new loan to replace your existing mortgage, typically done to secure better interest terms, reduce monthly payments, or access available equity in the home. If rates have declined below your current interest rate, refinancing can dramaticaly improve your financial circumstances.
- Home Equity Line of Credit: A Home Equity Line of Credit (HELOC) is a revolving line of credit that allows homeowners to borrow against the equity in their home, typically for major expenses like home renovations, education or medical costs, or debt consolidation.As you pay down your mortgage, and if your home’s value grows, homeowners build up ‘equity’ or an ownership stake in their property.
- Preparation for Sale: Keeping track of your mortgage balance can provide insight in when planning to sell your home. Understanding the outstanding amount will help you estimate potential returns from the sale.
- Uncovering Errors and Potential Savings: Reviewing your mortgage statements helps detect discrepancies like incorrect interest charges or irregular changes. You may also discover opportunities for savings, such as the elimination of private mortgage insurance (PMI) or promotions to reduce costs such as auto-payments.
How to properly evaluate your mortgage? Effective mortgage evaluation is detailed review of your current mortgage terms, market trends, and your financial goals.
Here are some steps you can follow to evaluate your mortgage:
- Understand Your Current Mortgage Terms: Read your mortgage agreement carefully review your mortgage statement to understand: interest rate (for your mortgage and the current market interest rates),, the Annual Percentage Rate (APR), monthly payment, and the overall term of your mortgage. Familiarize yourself with any clauses like early payment penalties.
- Principal: This is the initial amount of the loan without the interest. In every mortgage payment, a portion goes to the principal. Over time, as the principal decreases, homeowners will pay less in interest.
- Interest Rate: The percentage of the loan charged by the lender for the use of its money.
- Maturity Date: The date when the mortgage is to be paid in full.
- Equity: The difference between the current market value of the property and the outstanding loan balance.
- Monthly Payment: The amount paid to the lender each month, which includes portions towards the principal and interest.
- Amortization Schedule: This detailed timeline shows the breakdown of each mortgage payment into how much goes towards the principal and how much towards the interest over the life of the loan.
- Private Mortgage Insurance (PMI): Required when a homeowner pays less than 20% down payment is removed removed once the equity reaches a certain level.
- Prepayment Penalty: Some mortgages have a penalty fee if you pay off your mortgage early.
- Evaluate Real Estate Values in Your Neighborhood: Evaluating real estate values in the neighborhood annually allows homeowners to understand their home’s current market value, which directly impacts their property’s equity. Knows your homes value is vital when considering selling, refinancing, significant renovations, or contesting property taxes.
- Evaluate Current Interest Rates: Regularly evaluating current mortgage interest rates helps identify refinancing opportunities that could lower their monthly payments, overall repayment amount, and understand the competitiveness of their current rate.
- Assess your Financial Situation: Reflect on your income, future earnings potential, overall financial stability, and long-term monetary goal to understand your ability to make extra monthly payments, managing a HELOC, or the feasibility of refinancing to a shorter term loan.
- Consider Making Extra Mortgage Payments. Making extra payments towards your mortgage principal can: (i) significantly reduce the amount of interest you pay over the life of your loan because interest is calculated on the outstanding principal amount; and (ii) help you pay off your mortgage sooner; (iii) build equity faster to open up options such as paying off PMI earlier, selling for more profit, or taking out a HELOC.
Evaluate Property Taxes
Homeowners, as unexciting as it seems, have a responsibility to periodically review and evaluate property taxes. This could potentially result in savings, as well as identifying problems and errors.
Let’s take a minute to understand how property taxes are calucated.
Property taxes are based on the assessed value of your home and the property tax rate of your municipality. Each year, the assessed value of your home is determined by the local tax assessor, who evaluates the property’s size, location, improvements, and market value. This assessed value is then multiplied by the local tax rate to determine your property tax. The local tax rate is set by local officials and varies depending on your location and the budget needs of your municipality, county, school district, or other local entities that rely on property tax for funding. As such, these property tax rates can fluctuate year to year.
Reasons to review your property taxes are:
- Potential for Error: Like any assessment, your property tax bill is susceptible to human or machine error in the property’s assessed valuation upon which your tax is based.
- Changing Property Values: Property taxes are tied to home value. If real estate market conditions change, and your home’s value decreases, you could be entitled to a corresponding reduction in your property tax.
- Updated Tax Laws, Regulations, or Relief Progams: Tax codes are constantly changing. An annual review helps ensure you’re benefiting from any new tax laws, exemptions, or tax relief programs.
Here are key steps to take while evaluating your property taxes:
- Understand Your Tax Assessment: Review each component of your property, which includes the assessed value of your property, tax rate, and your final tax responsibility.
- Check for Accuracy: Ensureproperty details listed, like square footage and number of rooms, are accurate.
- Compare Assessment with Similar Homes: Compare your home’s assessed value with similar nearby properties to ensure your assessment aligns with the market average.
- Stay Updated on Tax Laws: Local tax regulators or consulting with a tax professional can help you identify new tax benefits you might be entitled to.
With these steps, you should have a comprehensive view of your property tax. But what if you find discrepancies?
- Contact Your Local Tax Assessor’s Office: If you believe there is an error in the assessed value of your home, reach out to your local tax assessor’s office. They can provide insight into how your property’s assessment was calculated and can rectify obvious errors.
- Prepare Evidence and Documentation: If your concern is not resolved, gather evidence to support your claim. This might include photos of your property, proof of your home’s purchase price, or valuations of similar local properties.
- File a Tax Appeal: If the tax assessor doesn’t agree to reduce your property’s assessed value and you still believe an error exists, you have the right to appeal. Research and follow the tax appeals procedure for your municipality, which may involve presenting your case to a local board or filing a legal petition.
Confirm Copy of Deed and Title Insurance Policy
The initial weeks following the closing of a presents a whirlwind of activities for the new homeowner. From moving arrangements and setting up utilities to handling interior changes and becoming acquainted with an entirely new living space.
Amid this flurry, there’s potential for crucial legal and contractual documents like the the deed and title insurance policy to be inadvertently misplaced or overlooked. These documents are not just bear long-term significance serving as proof of your homeownership.
Here’s a brief refresher on what the deed and title insurance policy are:
- Deed. Deed is the legal document that transfers ownership of the property and outlines the specifics about the property and parties involved. It’s your definitive proof of ownership and serves as a critical document for any future transactions, disputes, or legal complications related to your property.
- Title Insurance. title insurance policy is a safeguard against any potential legal troubles tied to the property’s title. It protects against the unknown, such as disputes over property ownership, liens, or other encumbrances that might arise from previous owners. Re-securing these documents annually ensures you have the most updated and accurate documents at your disposal.
How to save and store your deed and title insurance policy?
Maintaining digital copies is a smart and convenient approach. Scan these documents and create digital copies to store in a secure cloud storage service like Google Drive, Dropbox, or OneDrive. Be sure to protect these files with strong passwords and two-step verification, if possible, to add an extra layer of security against unauthorized access. Although digital copies are sufficient for almost all purposes, you may also consider storing these crucial documents in a safe place at home, like a fire and water-resistant lockbox, safe, or cabinet.
Review Municipal and County Records
Each city and county maintains records concering your property, incuding deed, property tax records, building permits, liens on the property. It is essentially for homeonwers to annually review city and county documents, as these records serve as public identification of dmensions, zoning, permitting, and legal status.
Regular review of these databases ensures:
- Accuracy: Errors can lead to future complications, this could include disputes with neighbors, incorrect tax bills, and mail being sent to the wrong address.
- Risk Mitigation: Detect fraudulent activities, such as unauthorized loans or deed transfers.
- Future Proofing: Regular checks ensure a smoother process when selling, as inaccurate records can cause delays or even sink potential deals.
When reviewing public records, pay close attention to:
- Property Deed: Confirming that the title is appropriately registered in your name is paramount.
- Zoning Records: Ensure records accurately reflect the zoning of the property. Inaccuracies can affect your use of the property, property value, and taxes.
- Property Tax Records: Check if the property evaluation and the tax levied are consistent with your knowledge and other similar properties in your area.
- Building Permits: If you’ve made any sanctioned renovations or changes in the past year, ensure updates are reflected on municipal records.
- Liens Against the Property: Regular checks can help detect if any unauthorized liens have been placed against your property.
If you notice unauthorized changes or errors in your municipal records, it’s essential to take action promptly. For basic issues, contact the municipal or county office with your findings and proof of discrepancy. These agencies can guide you through the correct course of action. If the government agencies cannot resolve the issue, you may need to consult with an attorney or law enforcement.
Annual Home and Safety Maintaineance
Owning a home is a significant investment, one that requires due diligence in maintenance to ensure it remains in excellent condition as years go by, as well as to preserves proeprty value, extend life and improve the effiicency of systems, and prevent small issues from becoming larger more expensive issues.
Below are 20 steps homeowners should take annually:
- Inspect Roof, Attic, and Basement: Regular checks can prevent problems like pests, leaks, or insulation issues. Watch for unusual smells, dampness, and changes in temperature.
- Clean Gutters: Cleaning out the gutters ensures proper drainage and helps prevent water damage. Remove any leaves, tree branches, or other debris that may have collected throughout the year.
- Service HVAC System: HVAC maintenance and repairs enhances the air quality in your home and extends the lifespan of the system.
- Test Smoke Detectors, Carbon Monoxide Detectors, and Fire Extinguishers: These devices safeguards your home and family. For detectors, press the “test” button to check they’re working if available and change the batteries.
- Check Electrical Outlets and Cords: Prevent electrical hazards by checking for any fraying wires, loose outlets, or any buzzing sounds when running appliances.
- Trim Vegetation and Lawn Care: Lawn maintenance includes aeration and seeding annually. Trimming plants and trees close to your house can prevent potential damage to your siding, roof, and nearby power lines.
- Inspect Plumbing for Leaks: Pay attention leaking faucets, clogged drains, or faulty water heaters to prevent mold issues, as well as to reduce utility bills and larger more costly problems.
- Flush Water Heater: This prevents the buildup of sediment, which can affect the performance of your water heater. Draining and refilling your water heater once a year can prolong its lifespan and enhance its efficiency.
- Pest Control: An annual pest control routine can keep away bugs, rodents, and other pests. Professional pest control services can offer preventative measures and address any existing issues.
- Examine Exterior Paint and Siding: Keep the exterior of your home looking attractive and prevent potential damage to siding. Look for chipping, fading, or peeling paint, and ensure the siding is secure without any opening for weather or pests.
- Check Home Security System: Tech glitches or outdated components can render your security system less effective.
- Clean Chimneys and Fireplace: A clean fireplace ensures efficient burning and reduces fire risks. Hire a professional chimney sweep annually to remove soot and debris.
- Seal Doors and Windows: Properly sealed doors and windows enhance energy efficiency. Check the weatherstripping and seals for any damage, and replace as necessary.
- Maintain Appliances: Appliance maintenance can prolong the life of your appliances. Check manufacturer guidelines for maintenance tips, and remember to clean or replace filters as needed.
- Mold and Mildew Check: Inspectt all areas of your property that may have water and dampness to spot and address mold growth early.
- Clean Dryer Vents: Accumulated lint in dryer vents is a common fire hazard and reduces efficiency.
- Check Exterior Drainage: Proper drainage prevents water damage to your foundation. Ensure that downspouts direct water away from your home and address any pooling issues.
- Inspect and Repair Fences: Repair any loose panels or improper openings.
- Test Sump Pump: Sump pumps can prevent your basement from flooding during heavy rains.
- Maintain Your Deck/Patio: Maintenance can prolong the life of your outdoor spaces. Inspect and repair any loose boards, reseal the surfaces, and clean them to prevent mildew.
Things You Should Have Done After Buying!
Did you review our blog “10 Steps to Take After Closing on Your New Home” or perhaps not take each of the steps yet?
Check out the summary below for anything that may have been overlooked!
- Change Locks and Key Codes: Change key locks and reset key codes for digital and smart locks to ensure safety and security.
- Change Addresses on Accounts: Update your address on bank accounts, credit card companies, investment accounts, insurance providers, loan accounts, government entities, digital services, monthly subscriptions, healthcare providers, and employers. – Ensure you receive important communications and avoid lost or mishandled mail.
- Change Utilities to Your Name: Contact each utility company to change utilities to your name after closing on your new home. Ensure continued access to critical utilities and accurate billing and usage information.
- Save Key Legal Documents: Secure important legal documents such as the deed, mortgage, promissory note, title insurance policy, settlement statement, and survey (if conducted). These documents provide proof of ownership, terms of the purchase, and clear title.
- Notify Friends and Family: Inform friends and family of your new address to ensure smooth communication. Avoid delays in receiving mail or packages and stay connected in urgent situations.
- Review Inspection Report: Revisit the home inspection report after closing to address current and potential defects. Prioritize repairs related to safety, structural concerns, HVAC, water intrusion, plumbing, and electrical systems.
- Estate Plan (Will and Power of Attorney): Create a will to designate how your assets, including your home, will be distributed after death. Appoint someone to handle your legal and financial affairs through a power of attorney in case of incapacity. POA allows a trusted person to handle property affairs, pay property taxes, manage mortgages or loans, and accept rental income.
- Registering with the City: Access city services such as waste and recycling collection, parks and recreation, sports, and local emergency services. Be eligible for homeowner benefits, subsidies, local aid programs, or property tax exemptions.
- Protecting Yourself from Home Buyer Scams: Be cautious of scams involving money, ownership, personal data, or offers that seem too good to be true. Verify the credibility of people, companies, or government agencies you are dealing with.
- Leave 5-Star Google Reviews: A positive google review is a nice guestor if you had a positive experience with realtors, loan officers, attorneys, inspectors, insurance agents, or title companies.
Special: Condos, Coops, and Landlords
- Review Meeting Minutes: All condominium owners should make it a habit to review the minutes from all condominium association or Strata meetings. These minutes often contain detailed discussions about the property’s current standings, future plans, budget allocations, and any new resolutions or policies. Reviewing these summaries ensures that owners stay abreast of possible changes that could affect their living conditions or the valuation of their property. It’s crucial to keep updated with these discussions to raise any concerns promptly and leverage or participate in decision-making processes.
- Check Changes to By-Laws: Another crucial task for condo owners is to regularly review any changes to the condominium’s by-laws. These rules govern how the condominium operates and the owners’ rights and responsibilities. Any change in a by-law could have significant effects on the owners, affecting their ability to rent out the unit, renovate, or even sell. By staying informed about these changes, owners can better manage their properties and avoid inadvertent violations.
- Review Maintenance Fees: Condo owners need to check maintenance fees every year. This is important because such fees could increase due to inflation or the need for major repairs or renovations in the condominium. Knowing about any increases in advance can help owners budget better and avoid surprises. It also gives them the opportunity to question any unexplained increases or expenses they think are unreasonable.
- Review Local Landlord-Tenant Laws: All landlords should review any changes in local, regional, or national landlord-tenant laws annually. These laws define the rights and responsibilities of both landlords and tenants and often undergo changes. Landlords must be familiar with these adjustments to avoid legal complications, protect their rights and ensure that they adhere to their obligations under the law.
- Review and Update Leases: Landlords need to review and update lease agreements every year. This includes revisiting clauses, rental amounts, terms of contract and policies about pets or renovations etc. As circumstances change, it is important to adjust lease agreements accordingly to avoid potential issues and disputes. An updated lease can also reflect any changes in the landlord-tenant laws, safeguarding landlords from inadvertently breaching these laws.
- Perform Regular Maintenance Checks: Maintaining the structural health of the property is the landlord’s responsibility. Therefore, conducting regular maintenance checks are essential. These checks ensure all systems and appliances, such as plumbing, heating, ventilation and air conditioning, are in reliable working order. Regular structural check-ups can also help them identify and rectify issues like leakages, infestations, or wear and tear early to prevent expensive damage.
- Investigate Property’s Market Value: The rental market is continuously evolving. A landlord must keep abreast of the current market trends and update the rent rates accordingly to ensure they are competitive yet reasonable. The annual review should involve investigating comparable properties in the area and adjusting rent amounts to reflect the property’s current value and market conditions.
- Review and Update Insurance Policies: Similar to the reasons for condo owners, landlords should also review insurance policies covering their properties annually. These policies should provide adequate coverage for any unforeseen circumstances, including fires, floods, or other damages, considering changes in the property’s value over the years. It’s crucial for landlords to understand any changes in their coverage or in the insurance market, including new regulations or discounts that might impact them. Insurance needs can change based on renovations, updates, and depreciation, so this review should be a part of their annual check-list.
- Review Meeting Minutes: Owners of cooperative homes are part of a corporation where they hold shares. Therefore, it’s crucial to review meeting minutes from shareholders’ or board meetings regularly. These notes will offer an understanding of the financial health of the corporation, changes in management, upcoming plans, rules, regulations and any potential issues that have been raised or faced by the community. It ensures owners stay informed and can make timely decisions or raise concerns, if any.
- Check Changes to Rules and Regulations: Rules and regulations, akin to bylaws in condos, govern the conduct and rights of all shareholders within a housing cooperative. They can affect an array of aspects, like quiet hours, pet regulations, alteration rules, and more. Reviewing any changes to these regulations allows the members to adapt their lifestyles accordingly, averting violations and fostering harmonious living within the co-op community.
- Understand Corporation Issues: Co-ops are essentially corporations, and as a member, it’s crucial to regularly understand any issues faced by the corporation. This could include financial difficulties, legal disputes, management problems, etc. This knowledge lets homeowners prepare for potential impacts on their living conditions, maintenance fees, or the valuation of their shares in the cooperative.
- Review Maintenance and Assessment Fees: Unlike condos, co-op owners often pay a monthly fee that covers not just general maintenance but also a portion of the building’s underlying mortgage and some utilities. It’s essential to review these fees annually since changes in the building’s mortgage or utility costs, significant repairs or renovations, etc., can lead to fee increases. Understanding where their money goes can help homeowners better plan their finances and question any unexpected increases.