Downsizing options and types of homes to consider.

Small House -Louisville

Small house in Louisville

Is your current home too large? Are you considering buying something smaller? I’ve already experienced this change and I hope the following commentary will help you better understand your options and avoid some major pitfalls.

Assuming you want to buy another home and not rent, there are three primary types of properties you might consider: single family homes, condominiums and patio homes.

A. Condominiums come in different flavors (e.g., patio homes, townhouses, etc.) and are subject to different state and local horizontal property laws, but I can offer some general differences with single family home ownership and then you can decide whether these differences are advantages or disadvantages. In general you own your unit, but not any of the land that surrounds it, which is deemed to be jointly held with all of the other owners in the complex. Everything outside your unit is a “common element” and not yours to change in any way. For example, you may not plant flowers and shrubs outside your unit or place flower pots on walkways. You also aren’t free to change any of the shrubbery.

There will also be rules and regulations, which may be included or appended to the condo association’s master deed or by-laws. These rules will typically address such activities as leasing, holiday decorating, trash collection, and set limitations on pets (i.e., weight limit and/or number), vehicle type and parking, use of the pool, clubhouse (if appropriate), satellite dishes, etc. These rules are designed to help in maintaining the appearance of the neighborhood and to insure standards of conduct essential to a comfortable, congenial and problem-free living environment.

The primary benefits of living in a condominium complex are the exterior maintenance is all done by someone other than you. No more worries about mowing the lawn, trimming the shrubs, pulling the weeds, sealing the driveway, painting the trim, replacing the roof, etc. In addition, there is often a community clubhouse, pool, tennis court that is yours to enjoy, but not maintain. The cost of all the exterior maintenance will be included in your monthly condo association fee. This fee will be based upon the total budgeted expenses divided by the total square footage of all the condo units. This annual cost per square foot is then multiplied by the square footage of your individual unit, to obtain your annual fee. Then the annual fee is divided by twelve to arrive at your monthly fee. (Not every condo association will use this calculation, but it will be similar.)

Condominium living is perfect for persons who have zero free time or are physically unable to handle the  chores required by ownership of a single family home. It would also appeal to persons interested in sharing their skills with others, by actively participating on the board or on a board committee. Finally, you can’t be too particular with how things look in your backyard or generally within the neighborhood, which will be discussed below.

 

B. Single family homes: If you don’t mind dealing with the aforementioned maintenance issues of lawn care, exterior painting, roofing, snow shoveling, etc, a smaller single family property might be for you.

Advantages of single family homes.

a. No rules and regulations, master deed or by-laws to follow, other than possible community deed restrictions, which are described below.

b. Living in an association of homeowners greatly reduces your ability to influence the value of your individual unit. For example, while the association may currently be well run by thoughtful community volunteers and a management company, there’s no guarantee that will continue. If you’re lucky enough to have a group of owners who don’t mind volunteering their time to ensure the association’s annual budget is fiscally sound and moneys are spent wisely, the value of your unit will be somewhat protected. However, people come and go and you always run the risk of electing a board that sees things differently than you. If that’s the case your only options would be to move or run for the next open board seat. You might also decide to join a committee and hopefully influence its members to head in direction more to your liking. In short, you have very little power unless you choose to volunteer and even then you have only one vote. If you’re a person who likes your immediate surroundings to look a certain way, have a need to constantly display your team’s colors and/or have many large noisy parties, condominium living may not be right for you.

c. Deed restrictions (“DR”) typically address most, if not all, of the following topics.

1. The minimum above grade square footage for each possible style of home. For example, the minimum allowable square footage for a 2-story might be 1800 sq ft, while the minimum for a ranch might be 1600. This type of restriction is designed to ensure all the homes are similar in size and none are significantly smaller than the others.

2. A certain type(s) or style(s) of home may be prohibited. For example, many subdivisions prohibit trailers or manufactured homes. Similarly, berm homes may be prohibited. Once again, a certain degree of conformity is the goal.

3. The DR also usually specifies the kind of construction materials that may be employed on the exterior. For example, some communities require all brick construction, or a brick front at a minimum. Others allow brick and/or wood and/or stone, but no vinyl or aluminum exteriors. Some DR has no limitations on construction materials. When looking in brand new subdivisions, it’s imperative to read and understand the deed restrictions. For example, it would be foolish to simply assume that since the model home is all brick all future homes will be too.

4. The types of allowable fencing may also be specified. Typically, chain link fencing won’t be allowed in newer subdivisions. Also, there will probably be a height restriction of six feet or less.

5. Many subdivisions also have parking limitations such as no street parking. Many newer subdivisions also require you to park your boat, trailer or mobile home in your garage.

6. There may also be limitations on above ground pools, tents, temporary structures and/or outbuildings.

7. You may be required to begin construction of your new home within so many months of closing on the lot. Similarly, you may be required to complete construction within so many months from the start date.

8. Limitations on exterior paint colors.

9. Limitations on running businesses from your home. For example, some subdivisions prohibit dentists or medical doctors, since parking would become an issue.

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