The Royalton: Property Tax, Unit Insurance and Association Papers in the First Year

Expect to need your own. The Texas condominium statute leaves untouched a mortgage holder's right to require an owner to carry insurance beyond what the association provides. The Texas Department of Insurance's guide adds that a lender requires coverage on a home that still carries a loan balance. Ask your loan officer in writing which coverage it wants, and in what amount.

The two policies answer different losses. The association insures the common elements as far as that coverage is reasonably available, and any claim under its policy goes through the association rather than through you. Give your insurance agent two documents: the association's insurance summary, which comes attached to the resale certificate, and your lender's written requirement. Ask for a quote that fills the space between them. Then send the declarations page to your lender before closing, so the loan file shows the policy it asked for.

Not under most policies. The Texas Department of Insurance's consumer guide says most home policies don't cover damage caused by floods. Read the exclusions in the policy you are offered, and ask your agent in writing whether flood is covered. At this address the question is a real one, because Buffalo Bayou Park runs directly across Allen Parkway from the tower.

The building's flood zone is read off the current federal flood map for the address. An elevation certificate, if one exists, adds detail. Ask for both by name before you buy. Keep the building's own 2022 record separate from bayou flooding. On 11 August 2022 an underground water line serving the fire sprinkler system broke, and water flooded the lower level. That was a utility failure, not the bayou rising. Put the question of a burst line to your agent alongside the flood question, and ask how your policy treats each cause.

Plan for three lines beside the mortgage: the monthly assessment on your unit, the property tax on its account, and your own unit policy. Each one has a document behind it. The assessment comes from the resale certificate. The tax comes from the appraisal district account with your own exemptions applied, and the policy comes from your insurance agent's quote.

The assessment is a yearly decision. Assessments must be made at least annually, on a budget the association adopts at least annually. The median fee on homes sold here has risen in most years of the last decade, so treat the first-year figure as a starting point. The tax line moves after year one as well, since a new owner's cap arrives later. Ask your lender how it sets the escrow for taxes and insurance, because it runs its own figures before closing.

Harris Central Appraisal District's guide says to file your regular residential homestead exemption application between January 1 and April 30. For a summer or autumn closing, the next window in that guide opens on January 1. Ask the district how it treats the year you bought in. Keep your closing date and your move-in date on file.

The exemption follows occupancy. A residence homestead is a home an owner occupies as a principal residence, and one person may hold it on one residence homestead in a year. The district's account for your unit lists any exemptions recorded on it. Check it after you file, and keep the confirmation with your closing papers.

The Texas State Law Library's guide says the certificate summarizes the association's financial status, fee structures, and any unpaid debts owed by the property in question, among other information. Read it as the association's account of itself and of the unit you are buying. That summary reaches beyond those three items, so read every line rather than the fee alone.

Under Texas law the certificate must state fourteen things. They include the assessment on the unit, capital spending approved for the next twelve months, the reserves, unsatisfied judgments and pending suits. The operating budget and balance sheet come attached. The unpaid-debt line matters at closing. Ask that any balance the certificate shows is settled before you take title. Then read the approved spending beside the reserves, because approved work with little set aside is the usual route to a special assessment.

Start with your own policy. Under the Texas condominium statute, the association's property insurance need not include improvements and betterments installed by unit owners. Finishes a seller added can therefore fall outside the building's coverage. The Texas Department of Insurance's guide describes condominium insurance as covering the interior of your unit, so ask your agent how far your policy reaches.

Two sets of papers settle the split. The association's insurance summary, attached to the resale certificate, shows what the building policy carries. Your inspection notes and the seller's records show what was changed inside the unit. Deductibles are the other line to ask about. On the association's policy, deductibles are amounts the board determines, and a claim on that policy is submitted by and adjusted with the association. Ask your agent how your policy responds when a loss falls under the building's deductible.