I would call HUD on this one..... but, part of ownership is control. On a condo, all you are purchasing is the paint, carpet, and air of the unit along with an undivided ownership in the whole. However, you have no control over the whole condominium project. I would not call for repair but rather comment as the homeowner cannot repaint the exterior of the condominium unit.
That's what I was thinking. I called HUD and they said that I needed to find out if that was on a list of things to be repaired by the HOA (and in a timely manner). If it was not, it wouldn't be eligible.
Note the peeling paint in the report along with any other exterior repairs like rotted wood, etc. State as Roger mentioned, that the owner can not legally paint/repair the exterior of the unit and let the DEU contact the association as to the preventive maintenance schedule. Obviouly, if peeling paint exists on a condo, the DEU will begn to wonder if there are adequate reserves set aside for repairs. Your repair item is not the responsibilty of the new owner/buyer which may create a default situation for HUD in the future, if the new owner couldn't afford the repair costs...so just report it and let the DEU have at it.
Also, don't forget to mention in the report about the overall condition of the project...like is there peeling paint observable throughout the project??
The answer to your question is "NO". In a condo you are appraising the individual unit...not the complex and that is from the walls in.
Do as mentioned above, report the exterior condition on your report. Most condos will have some deferred exterior maintenance. It is the responsibility of the HOA and management company (if there is one) to handle exterior repairs. Most of the time those are done in cycles.
As an example, my former residence was a condo in a complex of 124 units in 12 seperate buildings. Our paint cycle was on a four year basis...meaning four buildings would be painted in one year. There was a year between cycles with no painting.