About Condominiums
The Legal and Financial Benefits of Creating a Condominium

Condominium Conversions have been very popular in Massachusetts for years and is a process that changes the legal status of your property. A Condominium is a set of property rights, which allows an owner to divide the property and sell buildings or portions of buildings (individual units) separate from the land on which the buildings are located. For a property seller, the condominium conversion represents a way to legally separate and sell apartments one or more at a time. For a home buyer, the process represents a less costly way to enter the home ownership market since a condominium unit is typically much more affordable than a multifamily building. For a mortgage lender, the condominium conversion represents increased and stable buying power—the conversion of a three family building to condominium status results in thee separate home buyers with separate earning power borrowing lower amounts of money (thus reducing lender risk).

Below, please find some frequently asked questions:

What is the Master Deed?

What is the Declaration of Trust and By Laws?

What does the Condominium Master Insurance Policy Cover?

What is the Condominium Master Deed?

The Condominium Master Deed creates the condominium once it is recorded (along with the Master Plan for each floor and the Site Plan) and specifies what the common areas and boundaries are for each unit. It also specifies the rights and obligations of the unit owners, including the exclusive right to use areas for each unit (such as balconies, storage areas, parking spaces, etc.).

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What is the Condominium Declaration of Trust and By Laws?

The Condominium Declaration of Trust and By Laws create the condominium association (and rules) which will run the condominium. The Declaration of Trust also specifies the way in which common expenses will be paid. These common expenses generally include the condominium master insurance premium, common water and sewer bill, and general maintenance for the common areas.

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What does the Condominium Master Insurance Policy Cover?

All condominium associations must have a master insurance policy covering the common areas and certain installed portions of each unit. The Master Policy does not protect the Unit owners belongings. If the master policy is “studs out”, the Unit owner will need to purchase an Additions and Alterations policy, to cover things like floors, appliances, cabinets—anything permanent which is “inside” the studs. If the coverage is “studs in”, then the Unit owner will only need insurance for your personal belongings. In order to ensure that mortgage lenders will accept the master insurance, the policy must include public liability coverage of at least $1,000,000.00. You can get more details about these policies by contacting your insurance agent.

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