November 13, 2015 12:55 am
HOAs are typically set up by the original developer of the community with a set of rules called "Declaration of Covenants, Conditions, and Restrictions," otherwise known as "CC&Rs". One of the primary functions of the HOA is enforce and ensure that these "CC&Rs" are adhered to by individual homeowners.
One real estate blog recently posted a helpful punch list of questions to ask if you are buying a house or condo that is governed by a HOA:
- How much are the dues?
- What is the history of the due increases?
- Does it include building insurance or not?
- What are the specifics of the insurance and what insurance will you be required to carry vs. the HOA carries it for you?
- Are there HOA budget reserves for things like concrete repair, deck repair, staining/painting/etc?
- Do maintenance contracts look reasonable to you? Is one of the HOA members also one of the contractors?
- How much are transfer fees and capital reserve requirements?
- How many units are owner-occupied versus rented out?
- What is the current status of all membership dues? How many units are past due and by how much?
In addition, get the minutes from the past year's HOA meetings and read them to learn what topics they cover. This will tell you how picky they are and what type of violations spur actions against residents.
Published with permission from RISMedia.