In New or Existing Building Turnover to Condo Ownership, architecture expert witness David E. Chase writes that no matter how many units are involved, a future condominium association should consider both the physical and financial status of any new or existing complex before Turnover to assume full ownership.
There are two areas of inquiry. Financially, what will be the required dollar reserves provided from the developer to the association and physically, what are the benchmark building and site improvement conditions at this point in time? Make no mistake, Turnover is the absolute factual benchmark in time which will forever trigger future responsibilities, financial obligations and duties by all parties to the Turnover process.
For instance, perhaps you are interested in purchasing a unit in a newly constructed condominium and you need to test the long term viability of your investment. What will be the capital building reserve responsibilities of the new condominium association after the developer turns the project over to the new individual owners. Or suppose for the last 15 years you have lived in a rental apartment complex that recently was purchased by a developer, intending to convert it to condominium ownership. What are the responsibilities of the developer to prepare the complex for a future condominium sale.
To begin with the association should retain the services of a licensed Architect or Engineer to perform a Turnover Condition Report to establish not only the actual status of the improvement as a benchmark in time , that includes the physical condition of building systems in the common spaces and individual units, but also to “test” the applicable building codes. To be clear, this Turnover Condition Report should not be confused with a “punch list” which contains a list of items to be completed, repaired, refurbished and/or replaced, prior to first occupancy of the project. Usually a “punch list” is required by the financial institution funding the construction phase, to authorize final payment to the developer and contractor(s).