Shopping For A Home?
Here’s What You Need to Know About the HOA FIRST!
If you’re looking for a new place to purchase, there’s a good chance it will be a gated single-family community or townhome complex or condo that has an HOA. Prior to buying there are many things to consider. One of those things is the health of the HOA. Though you may think you understand how the HOA works, there can be many variations to that and lots of questions you can ask for clarity before you become an owner.
First of all, when you sign the closing documents for your new home, you are agreeing to abide to the covenants of the HOA. The HOA is a non-profit business and needs to be operated like a business in addition to following the state laws. Appropriately doing your due diligience on investing in your property should include asking the following.
Ask for financials on the HOA (Home Owners Association)
!) Look at the Income and Expenses and see if they are on track for the year.
2) The association should be saving to the reserves fund for future maintenance needs.
3) What if any differed mantenance do they have?
4) What is their history of Special Assessments?
5) Ask if they use a Professional Management Company?
6) How long have they worked with the Management Company?
7) Request a copy of the past three meeting minutes.
8) What is the percentage of delinquencies in the assessments?
9) What number of properties does that represent?
10) What is the dollar amount of the delinquencies?
These 10 questions should give you a very accurate look at the financial health of the HOA. If the declarant or developer is still in control of the HOA, these documents may be harder to come by. In a future blog we will cover the details of the declarant controlled HOA.
This due diligence shouldn’t be as complicated as it might look. Speak to your Real Estate agent and the current homeowner for more information. Happy Buying!
Exclusive Association Management, Inc. 770-949-5663 Putting the “unity” in community! ™