Posts tagged "Buying A Condo"

What’s the difference between condo and renters insurance?

Thanks!
Thanks so far but I was told I needed renters insurance b/c of our tenant. We own a condo and rent it out. Is this true?

Renter’s insurance only covers your personal belongings inside the home, whether it’s a condo, house, or apartment. It doesn’t cover the structure itself. So if you buy a condo and only have renter’s insurance, if the building catches on fire and burns to the ground your personal stuff is covered but they don’t pay to rebuild the building itself.

If you are buying a condo and the HOA fees include insurance, it means they will pay to rebuild the building if it burns down but NOT cover your personal belongings.

Does that make sense?

Do I need to buy Title Insurance for my condo? What is the risk?

I am buying a condo in a new development and paying cash for it. I understand that mortgage lenders require title insurance, but that isn’t an issue here. I understand that the insurance is there for peace of mind to protect the large investment, but I don’t understand what the risk is, especially since the other 110 new condo owners in the building are likely going to purchase title insurance at the requirement of their lender. The Title Insurance company wants to charge $820 for ALTA Owners Standard Coverage.

I don’t know about new construction, but I too, bought my sisters home for cash and I didn’t do a title insurance….My attorney advised me against it, but I know she didn’t have any liens on the property…..When we went to sell it, the buyers needed title insurance, for they were getting a loan and it came out clean….But I knew my sister and I know she has impeccable credit! I have to agree with the person that said, you don’t know if the builder may not have paid everyone, other contractors, who may come back and placed a mechanic’s lien….I would recommend it for this property…..BUY the insurance, you don’t know who you are dealing with….it just makes sense…

Simon Says: "here are Some Things to Think About When Buying a Condo in Santa Monica, Brentwood or Another Westside Los Angeles Neighborhood:”

Things To Think About When Buying A Condo

Condominiums have made homeownership affordable for many people. This is particularly the case on the Westside of Los Angeles, where theprices of single family residences are prohibitive to even the mostwell heeled professionals. There are however many things to considerwhen buying a condo in these areas:

Earthquake Insurance:

Approximately half of all condominium andtownhouse buildings on the Westside have earthquake insurance included in the homeowner’s dues.

Pros:

This protects the owners from having to come up with funds to payfor repairs, should an earthquake occur. Price of construction per square foot in Santa Monica, Brentwood and other Westside neighborhoods can be anywhere from $150-300. This makes a complete rebuild on a 1000sf condo at the very least $150,000 up to $300,000. Often the insurance provides funds for replacement housing shouldthe homeowners need to move out during reconstruction.

Some, not many, buildings were completely torn down and rebuiltafter the Northridge Earthquake in 1994. So no matter what thedeductible, these buildings were happy to have had earthquakeinsurance.

Cons:

Earthquake insurance can be very costly. Premiums tend to besignificantly higher for buildings that are looking for new coverageas opposed to buildings who signed on for coverage 20 years ago. The deductibles can be upwards of $250 -500,000, much higher thanwhat most buildings in Santa Monica suffered during the NorthridgeEarthquake in 1994. Personal Assessment Insurance can be had for a maximum of $50,000per condominium. You would be covered in an instance where your 10unit condo building had $500,000 worth of damage.

The federal government often supplies subsidized loans at very lowinterest rates for disaster victims.Many buildings in Santa Monica had to go through years of courtaction before their insurance providers would give them the financialassistance that was owed to them

Earthquake Insurance FAQ’s:

All of the units in a condo building need to subscribe to theEarthquake Insurance policy. Coverage cannot be given to units on anindividual basis.

Pet Policy:

Most condominium buildings have a restriction on pet size. Smallerbuilding and townhouse buildings tend to be more liberal while largebuildings are more conservative.

Pet size restrictions tend to be by poundage and number of petlimits. The most common is two dogs or cats under 20lbs each. Otherbuildings have 30 and 40lb limits. The average Labrador is over 40lbs.

If you have a pet or plan on getting one make sure you read theCC&R’s on pet restrictions. The CC&R’s are the rules that govern theHomeowners Association.

Pet Policy FAQ’s:

If a homeowner breaks the rules with regards to pet size or numberthe pet will be mandated to leave the building. If the pet does notleave the HOA can place liens on the property and or force courtaction to have either you or your pet forbidden entry.

Amenities:

Many people enjoy the idea of amenities such as pools, sauna, 24hour guard gated access. For many residents of these buildings theseamenities never become truly valuable. There are thousands ofresidents of local condo buildings who use the building pool aboutonce a year. Additionally, in Santa Monica and Brentwood there aremany local gyms that do a better job of motivating you. So, if you aregoing to buy in a building with amenities, and therefore higherhomeowners dues and purchase prices, make sure you are going to take full advantage of them.

I should also mention that if you are looking to live in a luxurybuilding; say an ocean view condominium on Ocean Avenue, none of the above applies. You are going to have amenities whether you like them or not and enjoy using or not using every minute of them.

Reserves:

After the Homeowners Dues are collected and used to pay debits tothe different vendors the left over money is put into reserves for thebuilding. Funds from the reserves can be used in case the buildingneeds a new roof or upgrades to the hallways and common areas.

Difference between a Condo and a Co-op:

In a condominium, the owner owns the space inside the wallsindividually and the common areas collectively as part of a group. Itis a pure form of homeownership, with the same rights andresponsibilities of a single family home. A co-op is owned by acooperative that issues shares to the building and the right to occupya given unit. As the owner, you own shares in the building not thespace inside the walls. Your right to occupy a particular section ofthe building is usually issued via a lease term that renews everyfifty years or so. About 95% of the multi-unit inventory in LosAngeles (Brentwood) and Santa Monica is condos. In New York City the majority of units are co-ops. The difference between buying a condo or a co-op in Santa Monica and Los Angeles is that buyers of co-ops tend to have less financing options available to them. You also have to be “approved” by the board. Here on the Westside the boards are pretty liberal in contrast to the stories you might have heard about New York City co-op boards.

Difference between a Townhouse and a Condo:

In Santa Monica and the other neighborhoods of the Westside of LosAngeles, people refer to single story residences as condos and double or triple story residences as townhouses. These are both condominiums in the legal sense of the term.

Simon Salloom is a Realtor with Coldwell Banker who specializes in Santa Monica Real Estate.Click here to learn more about Santa Monica Real Estate

Simon Salloom
http://www.articlesbase.com/real-estate-articles/simon-says-quothere-are-some-things-to-think-about-when-buying-a-condo-in-santa-monica-brentwood-or-another-westside-los-angeles-neighborhood-152391.html

possibly buying a condo, what’s the difference in home insurance and condo insurance?

i am possibly fixing to be buying a condo, but need to find out how much insurance is going to cost me every year. i noticed that there is "condo" insurance as well as home insurance. which one would be better or more appropriate. is condo insurance cheaper? what is the difference in the coverage ?

Your condo association purchases insurance on the building and premises. Broadly speaking there are two approaches condo bylaws take to insure the property.

One approach is the condo association agrees to cover only the exterior and common areas. You are responsible to insure the interior this can include walls, wall coverings, flooring, furnace, appliances, lighting, plumbing fixtures, kitchen and bath cabinets (basically everything inside your condo). In this scenario you are responsible not only for your personal property but also the entire interior of your condo. As an insurance agent I did not like this approach because it is very difficult to determine how much insurance you should have to be able to repair or replace everything in within the walls of your condo.

The other approach, which I always preferred, was more comprehensive where the association agrees to cover the entire unit as it was originally built. In this scenario you only insure your upgrades (i.e. bookcases, upgrades, finished basements. etc.) and your personal property.

You need to carefully review your condo bylaws or have a good insurance agent go over the bylaws with you. If you don’t insure the property that you are responsible for you could find yourself woefully under insured and perhaps unable to rebuild your condo.

In addition to insuring the part of the building you are responsible for you need to determine the replacement cost of your personal property within the condo.

Sorry for the long answer but it is a surprisingly complex question.

What are the most important things for buying a condo insurance? What are things that need to be included?

What if something happens to the condo due to the fire caused by something inside the apartment? Who will cover that? condo insurance or association master insurance?

Home insurance is actually very flexible. I’m not familiar with all the fine print of my policy, but my home insurance agent is always helpful. Try contacting your agent or a homeowners agent in your area. http://www.easyhomeinsuranceguide.com They will be able to assist you.