A condominium is a legal form of ownership, not an architectural style. We often think of condominiums as multi-story buildings with multiple units owned by individuals who share the costs of maintaining common areas. Other architectural styles, such as shared-wall units and stand-alone homes, can be condominium-owned. Regardless of the building style, condominium sales require complex disclosure obligations for sellers. Meeting these obligations requires the cooperation of the condominium association.
Disclosure Documents
I like to think of condominium ownership as a real estate investment with lots of people you probably don’t know. Imagine being offered the opportunity to invest half a million dollars in a building. You’d want to know everything you can about the building, its management, and your partners. Now, if you don’t care to do your due diligence, that’s up to you, but knowing whether the project is financially sound, the building is in good condition, and major repairs aren’t looming is wise. Wisconsin’s law lets buyers obtain key records and rescind their offers for any reason within a set time after accepting the offer. Here’s a link to the law
Who Benefits from Disclosure
Buyers certainly benefit from disclosure provided they read the documents. Some attorneys may disagree; sellers who provide buyers with all available information are better positioned to protect themselves if a buyer comes back after closing with an accusation. Licensees who read the documents and understand the topics the association is addressing are better positioned to protect themselves and their clients from surprises.
When to Obtain the Disclosure Documents
As a licensee, when I’m assisting in the sale of a condominium, I gather all the information before we begin marketing and make sure I am aware, as best I can be, of possible adverse conditions so I can make proper disclosures. Everyone benefits when buyers and sellers make decisions based on the facts available. Sometimes we do discover bad news that affects the salability of the condominium. Better to know ahead of time than to find out after an offer is accepted that we should have known an issue was lingering.
Prepare Yourself First
The attorneys for the Wisconsin Realtors Association prepared a document to help condominium associations prepare the disclosure documents owners will need to provide. Your association probably has the documents organized and available for your review. (Your condo may have a private owner’s website with all of the documents listed.) Before you put your condo on the market, it may be wise to gather the information, review everything as if you were buying instead of selling, and identify any items that may be red flags in a buyer’s eyes. Addressing these issues is much less stressful before you have an interested buyer and gives you the chance to eliminate small issues before they become major headaches.
Consult an Attorney
Condominium real estate transactions are complex. It’s always best to consult a real estate attorney when selling property. I’ve heard lawyers disagree about whether to disclose. I think it’s better to disclose and let someone walk away than to stay silent or ignorant, close on the sale, and then be dragged back in to defend your decision.