Condo shopping? Ask these 7 questions (© Eye Candy Images/photolibrary.com)Click to enlarge picture

© Eye Candy Images/photolibrary.com

You've found your dream condo, and you're ready to relax among the mango trees and swaying palms.

Hold everything.

To keep from getting stuck with a lemon, you have to do some homework. Here are the seven most important questions you should ask before buying a condo.

1. What's the beef?
Look at the minutes of the condo association's board meetings to see what owners have been griping about. If everyone was complaining about the faulty plumbing or the gardener's absence, you know that the complex is having management difficulties. Even if there aren't complaints, reading the minutes will reveal the kinds of projects that are under way at the complex, including those that the seller may not have mentioned. (Bing: How and when to sue your condo association)

2. Who has been naughty and who has been nice?
Find out the delinquency rates of present owners. People not paying their association dues on time is a sign of discontent or can show that the association might be underfunded.

What's your home worth?

3. How much is in the repair fund?
Ask if the community has done a reserve-fund review in the past five years. Lester Giese, author of "The 99 Best Residential & Recreational Communities in America," recommends the following formula: If the complex is less than 10 years old, the reserve fund should have 10% of the cost of replaceable items such as roofs, roads and tennis courts. For complexes between 10 and 20 years old, the repair fund should be at 25% to 30%. At 20 years, that amount should be 50% or more. Residents who brag that they don't pay much in maintenance may be in a complex that has poor upkeep or that is living beyond its means.

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4. Can you cover me?
If you look at nothing else, get a copy of the certificate of insurance, which is a summary of the association's policy. First, see if the replacement costs that the policy covers are an accurate estimate of rebuilding costs. Then ensure that the policy has a building-ordinance clause, which means that the insurance will cover the cost of bringing the building to code if rebuilding occurs. On older buildings, there may have been many code upgrades since construction. Finally, make sure that you understand exactly what the association policy covers and what you are responsible for. Smart condo owners will insure their personal belongings, along with any other items in the unit that the association's policy does not cover. If you have trouble understanding the insurance lingo, take the insurance certificate to an agent whom you trust and who understands the state laws.

5. Does the association present any legal problems?
Buying a single-family home without a lawyer is no big deal for many people. But with a condo, much more is involved. Have a local real-estate lawyer go over the association's bylaws. Do they make sense? Are they consistent with the state laws? Giese says he once found that the association bylaws of a large garden-style condo complex had been lifted from the books of a high-rise condo, leaving confused tenants with rules about shared hallway space and the correct use of garbage chutes. Also, have your lawyer screen the association to see if any owners have filed suit against it.

6. Is the complex renter-friendly?
If the renter population is more than 10%, there should be clear rental policies, either listed in the bylaws or tacked on as an amendment. Does the management company find renters for you? If so, do they get enough good renters? Ask other tenants about their experience. In addition, ask to see the association's rental lease, and have a real-estate lawyer look it over. Remember, though, that an association can change its bylaws to prohibit or restrict renting at any time. The more owners who rent out, the less of a chance that will happen.

7. Am I my community's keeper?
Watch out for a condo whose owners manage the place themselves. Although many are operated efficiently, self-management can lead to more hassles for owners — especially those who live thousands of miles away. If the complex is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners and people in nearby buildings. And be sure to interview the day-to-day manager directly. If you hook up with a bad manager, you can be sure of this: Your dream condo will keep you up at night.

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