Heritage Falls

Fourteen units changes the arithmetic completely

An association's fixed costs do not scale down with the number of units, so a very small association pays a great deal per unit for ordinary things.

Insurance, management, accounting, the annual audit or review, legal advice and the reserve study cost broadly what they cost whether there are fourteen units or two hundred. Divided by fourteen, each of those is a much larger line on each owner's statement.

The same is true of the large replacements. If the association is responsible for roofs, siding, driveways or a private road, the whole bill lands on fourteen households. One roof replacement across a small association can be a five-figure sum per unit if reserves have not been building toward it — and in an association this size there is no cushion of numbers to spread it.

Which makes the reserve study the single most important document here, and its absence the single most important finding. Ask for the current reserve study, the reserve balance, what the association is responsible for replacing, and when each of those components was last done. In a fourteen-unit association those four answers effectively price the purchase.

The compensating advantage is real. Fourteen owners can decide something in an evening, the accounts are simple enough to understand in full, and there is no professional distance between the owners and the decisions. Small associations are often better run than large ones — but when they are not, there is nowhere to hide.

Governance has a corresponding fragility. A board needs officers, and fourteen households is a small pool from which to fill them year after year. Ask who is on the board, how long they have served and whether anyone is prepared to take over.

Walk-out lower levels, and what to check

Walk-out lower levels appear through this stock, and the distinction worth insisting on is between a true walk-out and a daylight lower level.

A true walk-out has a door at grade on the downhill side, which makes the lower level a genuine story of the house with its own entrance and full-height windows. A daylight lower level has windows above grade but no door, which is better than a standard basement and materially less than a walk-out.

Listings use the terms loosely and sometimes interchangeably. The difference is worth real money and is settled by looking, not by reading.

Either way, a lower level that is finished and partly below grade is where water problems show. A grade that falls away from the building on all sides, gutters and downspouts discharging well clear of the foundation, and no staining at the base of the finished walls are the things to look for. Where the lower level walls are finished, ask directly whether there has ever been water and whether there is a sump pump — and if there is, whether it has a battery backup, since a pump without one is useless in the storm that causes the power cut.

In a condominium there is a second question a house does not raise: whether the lower level walls and floor are unit or common element. The master deed says, and it decides who pays if water gets in.

A 2004 to 2005 build at around twenty years

A two-year build window is as tight as a build window gets, which means the units are genuinely one product — one code cycle, one generation of materials, one crew — and a finding on one unit is informative about the others.

What twenty years brings is the first replacement cycle, and it arrives across all fourteen units at once. Original roofs are approaching or at the end of a typical asphalt shingle service life. Original furnaces, air conditioning and water heaters are at or beyond normal expectancy. Original double-glazed windows begin to show seal failure as fogging between the panes.

In a fourteen-unit association, a roofing cycle that arrives across every building in the same few years is precisely the scenario a reserve fund exists for — and precisely the scenario that produces a special assessment where one was not built.

So the question is not whether the roofs are due. It is whether the money is there.

What the association documents decide

Buying a condominium unit means buying into a corporation as well as a home, and the corporation's condition is not visible at a showing. Four documents settle it: the master deed and its exhibits, the bylaws, the current budget and the reserve study.

The master deed defines what the unit actually is — where the boundary runs between unit and common elements, and what limited common elements are assigned to its sole use. That is the most misunderstood part of condominium ownership, and it decides who pays for a great many things.

The bylaws set the rules that govern daily life: what may be altered, what may be parked, whether units may be leased and how many at once, and how the board is elected.

The budget and the reserve study together answer whether the association is solvent. An association with thin reserves and a large component near the end of its life is not cheaper — it is a deferred bill with an unknown date, and it arrives as a special assessment.

Board minutes are where a coming expense, a dispute or a construction defect claim surfaces first, and they are the most informative document nobody reads. I go through the recent ones as a matter of course.

One Michigan detail worth knowing: condominium documents are amended by recorded instrument, so what is recorded governs regardless of what any summary says.

Schools

This community is served by Ann Arbor Public Schools. District boundaries are redrawn from time to time.

Assignment is set by address rather than by neighborhood name, and district boundaries in this county cross municipal and postal lines routinely. District is one of the larger drivers of price difference between otherwise comparable properties, so comparables should be matched on it as well as on municipality.

Buying or selling here

In a fourteen-unit association the documents matter more than the finishes, because the exposure per owner is larger than anywhere else around here.

For a seller, a current reserve study with a healthy balance, a clean set of minutes and a clear statement of what the assessment covers answer the questions a well-advised buyer will ask — and in an association this size those answers are genuinely reassuring rather than routine.