Real Estate & Condo Glossary

A

Amortized Assessment

A special assessment broken into monthly payments over 2–5 years rather than paid as a lump sum. A $35,000 assessment amortized over 3 years equals roughly $200/month on top of all other carrying costs.

B

BERDO (Boston)

Building Emissions Reduction and Disclosure Ordinance. Boston's building performance standard requiring large buildings (20,000+ sq ft) to reduce emissions on escalating deadlines. Non-compliance results in fines. Similar to Energize Denver and Local Law 97.

Building Performance Standard (BPS)

A local or state law requiring existing buildings to meet energy efficiency and greenhouse gas emissions targets by specific deadlines. Over 40 U.S. cities have enacted BPS. Compliance typically requires major capital expenditures for HVAC, insulation, windows, and electrification — costs split among condo owners via special assessments or HOA fee increases. See also: Energize Denver, Local Law 97, BERDO.

C

Carrying Costs

The recurring monthly expenses of owning a property that do not build equity. For a condo, this includes HOA dues, property taxes, insurance, utilities, special assessments, energy mandate compliance, metro district taxes, and maintenance reserves. A mortgage-free Denver condo carries approximately $1,900/month in carrying costs as of 2026.

CAT Bond (Catastrophe Bond)

A financial instrument that transfers natural disaster risk from insurance companies to capital market investors. When CAT bond yields rise, it signals that the market is pricing in higher disaster risk — which flows directly into homeowner and condo insurance premiums within 6–18 months. Track CAT bond markets at Artemis.bm.

Common Elements

The shared portions of a condo building that all owners are responsible for maintaining: hallways, elevators, roof, parking garage, pool, lobby, and building systems. Repairs to common elements are funded through HOA dues or special assessments.

D

Deferred Maintenance

Repairs and replacements that should have been performed but were postponed to keep HOA fees low. Deferred maintenance is the primary driver of large special assessments. Post-Surfside inspection mandates are exposing decades of deferred maintenance across the country.

E

Energize Denver

Denver's building performance standard requiring buildings over 25,000 sq ft to reduce energy use and emissions by 2024, 2027, and 2030 deadlines. Non-compliant buildings face fines of $0.70 per square foot, escalating annually. Estimated compliance cost per condo unit: $15,000–$125,000 depending on building age and condition.

Equity Conversion Rate

The percentage of your total monthly housing payment that actually builds equity (principal paydown). For a typical condo with high carrying costs, only 11–13% of total monthly payments build equity — the rest exits your net worth permanently.

H

HO-6 Policy

A condo unit owner's insurance policy. Covers the interior of your unit (walls-in), personal property, and personal liability. Separate from the building's master policy, which covers common elements and the building structure. HO-6 premiums have doubled since 2020 in many markets.

HOA (Homeowners Association)

The governing body of a condo or planned community. The HOA collects monthly dues, maintains common elements, enforces rules, manages the reserve fund, and levies special assessments. HOA boards are typically volunteer owner-members, though day-to-day management is often outsourced to a management company.

HOA Reserve Fund

Money set aside by the association for future major repairs and replacements (roof, elevator, parking garage, etc.). A well-funded reserve is 70%+ of the amount identified in a professional reserve study. Below 30% is a warning sign that large special assessments are likely coming. See also: Reserve Study.

L

Local Law 97 (NYC)

New York City's building performance standard imposing carbon emissions caps on buildings over 25,000 sq ft. Penalties up to $268 per metric ton of CO2 over the cap. Affects most NYC condo buildings. Similar to Energize Denver and BERDO.

M

Master-Metered

A building where utilities (usually water) are measured by a single meter for the entire building rather than individual units. Costs are split equally or by unit size, meaning you subsidize inefficient neighbors. Common in older condo buildings.

Master Policy

The building-level insurance policy covering common elements, the building structure, and shared liability. The cost is passed through to unit owners via HOA dues. Master policy premiums have tripled since 2020 in many markets due to post-Surfside reforms, CAT bond repricing, and climate risk reassessment.

Metro District

A special taxing district created by a developer to finance infrastructure (roads, water, sewer, parks) for new developments. Property owners pay an additional property tax of 50–80 mills on top of regular county and city taxes, adding $2,000–$4,000+ per year. The debt obligation lasts 30–40 years. Common in Denver suburbs for developments built after 2005. Rarely disclosed prominently during home purchases.

Milestone Inspection

A mandatory structural inspection required by Florida law (post-Surfside) for buildings 3+ stories tall within 30 years of construction (25 years within 3 miles of coast). Other states are enacting similar requirements. Phase 1 is a visual inspection; Phase 2 involves destructive testing where deterioration is found.

Mill Rate

A property tax rate expressed as dollars per $1,000 of assessed value. A 50-mill rate means $50 in tax per $1,000 of assessed value. Metro districts typically add 50–80 mills on top of the base county rate.

P

Property Investability Score (PIS)

A framework introduced in The Condo Trap for evaluating any residential property across 7 risk dimensions: energy mandate exposure, insurance cost trajectory, tax burden trajectory, environmental risk, HOA financial health, local regulatory direction, and market supply/demand dynamics. Each dimension scored 1–10; total out of 70. Most condos in mandate-heavy cities score below 40. Try the calculator.

Price-to-Rent Ratio

Purchase price divided by annual rent for a comparable property. Above 15x generally favors renting; below 15x favors buying. A $400,000 condo with comparable rent of $1,800/month has a ratio of 18.5x — favoring renting. The Condo Trap's True Cost Calculator computes this automatically.

R

Reserve Study

A professional engineering and financial analysis that identifies all major building components (roof, elevator, HVAC, parking structure, etc.), estimates their remaining useful life, and calculates how much the HOA should be saving annually to fund replacements. A well-maintained building should be funded at 70%+ of the reserve study's recommended amount. Request the most recent reserve study before buying any condo.

S

SIRS (Structural Integrity Reserve Study)

A Florida-specific requirement (post-Surfside, effective 2025) mandating that condo associations conduct engineering inspections of structural components and maintain fully funded reserves for those components. Associations can no longer waive reserve requirements for structural items. Similar requirements are spreading to other states.

Special Assessment

A one-time charge levied by an HOA or condo association to cover costs that exceed the reserve fund. Common triggers: roof replacement, structural repairs, elevator modernization, fire suppression upgrades, or energy mandate compliance. Post-Surfside, assessments of $50,000–$200,000+ per unit are becoming common. Payment plans typically spread costs over 2–5 years. Special assessments build zero equity.

Surfside Collapse

The collapse of Champlain Towers South in Surfside, Florida on June 24, 2021, killing 98 people. The disaster triggered nationwide reforms including mandatory structural inspections, reserve study requirements, and higher insurance coverage minimums — all of which have significantly increased the cost of condo ownership across the country.

T

TABOR (Colorado)

Taxpayer's Bill of Rights. A Colorado constitutional amendment limiting property tax growth rates. However, TABOR does not apply to metro districts or special taxing districts, which is why Denver-area condo owners can face both TABOR-limited county taxes and unlimited metro district taxes simultaneously.

U

Unfunded Pension Liability

The gap between what a state or city has promised to pay retirees and what it has actually set aside. The national total exceeds $5.1 trillion. Property taxes are the primary mechanism for filling this gap. In Chicago, 80% of property taxes go to pension payments. These obligations only grow, creating permanent upward pressure on property taxes.