Sage-Tips

How do you research a condo HOA?

How do you research an HOA?

1. Financials and fees. The biggest problem with buying a property that has an HOA is that their operations are largely secret.
2. Special assessments. In addition, you also want to ask about special assessments.
3. Personal experience. The property itself should be able to tell you a lot about the HOA.

What to know about an HOA before buying?

2. Can I See the HOA Documents Before I Buy? It’s so important buyers take a magnifying glass to the HOA documents,” says Kim Howard, Realtor, and Co-Founder of Howard Homes Chicago. The documents will include the covenants, conditions and restrictions, bylaws, and general HOA rules and regulations.

How do you evaluate a condo association?

Evaluate the financial statements. Take a good, hard look at the bank statements and budget. Verify that it’s reasonable and complete. Then, take a look at the association’s savings reserve. As a general rule, an association should have savings equal to at least 10-15\% of its annual budget.

How do you think about HOA fees?

When you evaluate HOA fees, consider what you’re getting for your money. It’s helpful to compare fees among HOA-run neighborhoods so you can see, for example, if one charges $100 per month more than another for essentially the same services.

How do I know if my condo association is healthy?

How Do I Know How Healthy an HOA Is?

1. #1. Take a look at the landscaping and outdoor maintenance.
2. #2. Ask to see the associations budget and reserve study.
3. #3. Talk to the property management company.
4. #4. Review the covenants, conditions, and restrictions also called the CC&Rs.
5. #5. Talk to current homeowners.

What questions should I ask when buying a condo?

Ask These Questions When Buying a Condo

• How Much Are the Fees?
• What Do the Condo Fees Cover?
• Are There Pet Restrictions?
• Do I Still Need to Purchase Insurance?
• What Are the Rules?
• Is There Any Pending Litigation?
• Are There Any Special Assessments Due or Coming Up?
• Can You Have a Grill on Your Deck?

What is a good reserve fund for a condo?

Assuming an average monthly condo assessment of $400, this can mean somewhere between $60 and $160 per unit, per month should be earmarked for Reserves. If the average condo represents 100 units, that translates to only $2 to $5 per unit, per day.

What to look for when reviewing Hoa financials?

Here are questions that help determine how the HOA board manages finances to make sure all runs well financially.

• Who handles the HOA’s finances?
• Can you get a printed history of HOA dues for each year for the past 10 years?
• How often does the HOA create and analyze financial reports?
• How large is the HOA reserve fund?

Should you ask about your Condo’s HOA when buying?

In the situation where you are buying a condo, you might not have much of a choice. HOA-style organizations are necessary to keep condos in good shape and ensure that everyone does their part to participate in upkeep. However, you can still ask questions about the homeowners association where you are buying.

What is a condominium homeowners association?

Condominium Homeowners Association Explained. A condominium HOA differs from a regular homeowners association in that there is a significant amount of commonly owned property in a condominium. Each owner has his or her individual unit, but everyone else in the condo, for instance, shares the roof of that unit.

How do you determine if a condo association is well organized?

Again, the bylaws or CC&Rs should specify the procedures for any special assessment, and whether or not a special assessment requires the vote of the members (owners). By reviewing the association’s financial records, you can potentially determine whether or not it is well organized and financially solvent.

What can An Hoa do to disrupt your investment property?

Repair/replacement for parts of your condo you don’t own (in some cases roofs and windows). As you can see, an HOA wields a lot of power to disrupt your investment. That makes it essential to learn as much as you can before purchasing a condo or property that’s governed by one.