Questions to Ask About the HOA Before Buying

Questions to Ask About the HOA Before BuyingIn Southern California, you'll find both houses and condos that are in HOA managed communities. While an HOA is not the right fit for all homeowners, it does offer some attractive benefits. If you're about to buy a home with an HOA, there are some questions you should ask first to find out how well managed it is. 

Here's what we can help you find out before you close on a house with an HOA.

What are the HOA fees and what do they cover?

Start by finding out what your regular HOA dues will be. Ask about the monthly, quarterly, or annual dues, and understand what these fees cover. Do they include amenities like a pool, gym, or community events? Are they used for landscaping, security, or general maintenance? Knowing the exact amount and what it covers will help you budget accordingly and make sure the home truly fits in your price range.

Different HOAs cover various services and amenities. Clarify what is included in your fees. Some common inclusions are:

  • Maintenance of common areas
  • Trash removal
  • Landscaping
  • Security services
  • Insurance for common areas
  • Recreational facilities

Knowing what’s covered can help you evaluate if the fees provide good value for the services and amenities offered.

How often have HOA fees increased?

It’s important to know the history of the HOA fees. Ask how often they have increased over the past few years and by how much. Frequent or significant increases might indicate financial instability or mismanagement. Understanding the pattern can help you anticipate future costs and assess whether the community is maintaining its facilities and services properly.

Are there any special assessments planned?

Special assessments are additional charges that HOAs can levy to cover unexpected expenses or major projects not included in the regular budget. These can be costly and arise from significant repairs or improvements. Ask if any special assessments are planned or anticipated in the near future. This will help you avoid unexpected financial burdens, and is particularly relevant if you're looking at an older community. 

What are the community regulations?

HOAs enforce rules and regulations to maintain the community’s appearance and harmony. Ask for a copy of the governing documents, including the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and rules and regulations. Review these documents thoroughly to understand what is allowed and what isn’t. Some common restrictions might involve:

  • Exterior home modifications
  • Parking regulations
  • Pet policies
  • Noise restrictions
  • Landscaping requirements

It's important to make sure that the CC&Rs and other rules align with your lifestyle and your plans for the home. For example, if you plan to rent the property out, you need to make sure this will be allowed by the HOA. If you have certain renovations or a  home addition in mind, confirm that these things will be allowed. 

How financially stable is the HOA?

Understanding the financial health of the HOA is critical. We can help you request to see the HOA’s financial statements, including the budget, reserve funds, and any recent audits. A well-funded reserve indicates that the HOA is prepared for future repairs and maintenance, which benefits you because it reduces the likelihood of special assessments. 

Are there any pending lawsuits?

Legal issues can significantly impact an HOA’s finances and operations. Ask if the HOA is currently involved in any lawsuits or if there are any pending legal matters. Ongoing litigation can lead to increased fees and assessments, as well as affect the overall atmosphere of the community. While you may not be able to access all the details, you can likely get a feel for whether this is a community you want to stay away from. 

Don't Hesitate to Have Your Questions Answered

Remember, you don't have to feel hesitant about asking these questions. Buying a home is not the time to be overly polite or timid; instead, protect your investment by gathering all the information you need to make a confident purchase. 

There is a general consensus among real estate experts that it's worth your time and effort to get a clear picture of the status of the HOA. I reached out to condo sales expert Bill Gassett of Massachusetts Real Estate News to get some tips on buying with a homeowner's association. Bill provided some excellent advice.

"There are a few vital things you should always know before buying into an HOA. The first is the rules and regulations. It is essential to know that you can live with what governs the community. I have heard horror stories about buyers not doing proper due diligence and regretting their purchase decision.

The second vital consideration is the financial standing of the community. This encompasses a few different topics. The first is understanding the association dues and what you're getting for your money. It is essential to know that you're not paying for things you won't use. For example, a tennis court.

You should also know about any special assessments which could crush you financially. For example, if all the roofs need replacing and the community does not have the money to make the improvement. This ties into the last consideration which is ensuring there is ample money in the reserve fund. Without being well funded owners will be taking it out of their own pocket which could be very depressing.

When buying with an HOA never skip the due diligence process. Get all your questions answered to your satisfaction."

Want to learn more about homes for sale in Southern California? Contact us any time. 

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