Condo Association Management

What does it mean when you buy a commercial condominium unit in an association?

This question can best be answered through a hypothetical situation where a condo building is burned completely to the ground. By explaining this situation you'll have a better understanding of what buying a condo means, and how to properly insure your condo unit.

I'll paint a bit of a picture ... Where there was once a beautiful, 2 story, 50,000 square foot, commercial office condo building that housed your office - there is nothing. Well, close to nothing. There is some rubble, your insurance policy and the association's insurance policy.

In a condo association everything is owned in common; excluding the airspace inside a condo unit and it's interior improvements. I'll better define this by describing who would re-build what part of a condo building in the event of a fire.

Association Responsible to Replace:

Any improvements on the lot that the development sits on.

• Landscaping
• Parking lot poles
• Monuments
• Elevators
• Roofs
• Building structure (the "shell" of the building)
• Irrigation systems
• Fences

Owner Responsible to Replace:

Any interior improvements built inside of the condo unit's airspace.

• Interior improvements (walls, ceiling tiles, etc.
• Interior bathrooms
• Office furniture
• Office equipment
• Interior electrical wiring
• Interior plumbing servicing the unit
• Lighting
• Computer equipment

Common Area Also Defined in CC&R's:

Coveneants Conditions and Restrictions (CC&R's) further define common area specifics. Questions to think about when specifically discussing association vs. owner responsibility in terms of a condo building are listed below:

• Do I own my HVAC unit or does the association?
• If a fire spinkler heads breaks in the interior of my unit does the association pay for the damages?
• Who is responsible to fix an exterior window that is broken?
• Who replaces the exterior door frame to a condo unit in the event of a break-in?
• If there is a roof leak who replaces the stained ceiling tile?
• Who repairs a concrete tilt up wall that is leaking water into the interior of my unit? Who is responsible to repair the damages to the interior of my unit?
• Is the electricity separately metered for each interior condo unit?

The list could continue for eternity, but I would guess few people that own a condo unit could tell me the answer to those questions if asked.

In short, if a condo building burnt down the association would replace the exterior shell of the building and each owners' insurance policy would pay to re-build their interior improvements. Said another way, when buying a condo unit you purchase the interior airspace, and any improvements constructued inside that that airspace.