How to Handle Deferred Maintenance in an HOA as a Real Estate Agent?

Deferred maintenance can be a significant issue when selling an apartment. It affects not only the property’s value but also its financing. How can you identify this as an agent, and what advice should you provide?

What is deferred maintenance?

Deferred maintenance refers to essential repairs or renovations needed for shared parts of a building, such as:

• The roof.
• The façade.
• Common areas like staircases.

How to identify deferred maintenance

1. Review documents:
   1. Deed of division: Check for maintenance-related agreements.
   1. Maintenance plan: Ensure it exists and is up to date.
   1. Meeting minutes: Look for discussions about maintenance issues.
2. Inspect the building:
   1. Look for visible issues like leaks or cracks.

What can you do?

• Advise the seller:
  • Suggest that sellers disclose and address maintenance issues before listing.
  • Highlight the HOA’s legal obligation to reserve funds for upkeep.
• Inform the buyer:
  • Make sure buyers are aware of potential future costs for maintenance.

Why does this matter?

Buildings with deferred maintenance are harder to sell and may face challenges with lenders. Proper communication ensures no surprises for either party.