The Condo Warrantability Checklist: 5 Things Every Bergen and Hudson County Condo Owner Needs to Verify Before Monday

What to check: Ask your condo association for the most recent reserve study. It should be less than 36 months old. The association should be funding reserves at or above the study's highest recommended level.

Why it matters: Fannie and Freddie want to see that the building is financially healthy and planning for future repairs. A stale reserve study or underfunded reserves is a red flag that signals the association may not have the funds to address major capital expenses.

What to do if it fails: Request the reserve study from your association. If it's older than 36 months or reserves are underfunded, the association needs to update the study and adjust contributions before you list. This is a board-level action, so bring it up at the next meeting or contact your property manager directly.

What to check: Review the building's master insurance policy. The per-unit deductible for hurricane or wind damage must be at or below $50,000. This is now a hard requirement under Fannie and Freddie's updated guidelines.

Why it matters: If the deductible exceeds $50,000 per unit, the buyer's lender may not approve the loan. This is the single most common reason deals fall through right now. Many buildings along the Hudson River in Edgewater, Fort Lee, and Weehawken carry wind deductibles that exceed this threshold because of the higher risk profile near the water.

What to do if it fails: Contact your insurance agent about reducing the deductible. This may require higher premiums, but it's necessary for warrantability. Some associations are exploring layered insurance structures or separate policies to address this. Start the conversation now, because insurance changes take time to implement.

What to check: Ask your association for the delinquency report. The percentage of units that are 60 or more days past due on HOA dues must be under 15%.

Why it matters: High delinquency rates signal financial instability. Lenders see this as a risk that the association can't maintain the building or handle unexpected expenses. If too many owners are behind on their dues, the association's cash flow suffers, and so does your ability to sell.

What to do if it fails: This is an association-level issue. If delinquencies are high, the board needs to address collections before you list. This takes time, so start now. Escalated collection efforts, payment plans, or even lien filings may be necessary. If you're planning to sell in the next 90 days and your building has a delinquency problem, you have a timing challenge that needs a frank conversation with your agent.

What to check: The building must have fidelity bond (crime) coverage and adequate general liability insurance. These are standard requirements that many associations overlook.

Why it matters: Fannie and Freddie require proof of these coverages. Without them, the building fails Full Review. The fidelity bond protects the association against employee theft or fraud, and general liability covers accidents on common property. Both are non-negotiable.

What to do if it fails: Contact your insurance agent to add or update these coverages. Most associations already have them, but the coverage amounts may need to be verified as adequate under the current guidelines. Don't assume they're in place just because they were in place last year, the requirements have changed.

What to check: There should be no pending lawsuits against the association related to structural issues, including facade problems, concrete spalling, mold, or other building defects.

Why it matters: Litigation is an automatic red flag under Full Review. Even a minor lawsuit can delay or derail a sale. This is especially relevant for buildings in Edgewater and Fort Lee where aging waterfront construction has led to a number of facade and concrete litigation cases in recent years.

What to do if it fails: If there's pending litigation, you need to disclose it to buyers. Consult with a real estate attorney about how this affects your sale timeline and pricing. Some buyers may still proceed, but they'll need a lender who can work with the situation and the right disclosures.