Questions to ask the HOA before buying.
Buying a condo or townhome is more than four walls and interior air space, it also means buying the homeowner association. Smart shoppers examine all the homeowner association documents, including its latest financial statements to determine whether one is buying a money pit or a gold mine. Here are the most important questions a buyer should ask:
How financially sound is the HOA?
To determine this, ask for and read (yes, they are long, at least 50 pages or more) copies of the following documents:
These documents will tell you:
If special contributions are expected to address deferred maintenance
Planned capital improvements
Amount of cash reserves
If the association is or has been sued
The history and the likelihood of increased fees
What services are covered by your monthly payments? Does it include the payment of:
Ground maintenance / gardeners
Pool, spa or fitness centers
Streets and sidewalks
Assigned parking / metro (and if so, how many spaces?)
How do you compare the rates of assessments from other condominiums in the area? I sold an apartment in an older complex, where the monthly fees are $120. Renovated apartments around the corner had a maintenance fee of $ 190. The main difference between the two complexes had been remodeled units, stainless steel appliances and granite counter-tops in the kitchen. That’s why buyers ask, “Is it worth $ 70 a month to own stainless steel appliances?” For some buyers, the answer is “yes.”
Who manages the complex?
Larger complexes require professional management. That could cost more than hiring a professional company, but in the long run tend to save money. Exercise bargaining power in negotiating professional management services such as offers for gardeners or general maintenance, as they represent a greater number of complexes.
How many units are rented?
Nobody likes tenants. Not that renters are bad people, but there is some truth that the tenants do not take care of the goods in the same way that an owner occupier would take care of it. In addition, some lenders will not lend money to a buyer if more than 25% of the units in the complex are rented. Some homeowner associations refuse to let the owners rent their unit for more than 30 to 60 days, if at all.
How quiet are the units?
Ask neighbors to give potential buyers an idea of the noise factor. But driving in the area late on Saturday night will also let you know. It is best to purchase a unit in the corner because there is less common (side) walls means less noise. However, the soundproofing does not help much if your next door neighbor enjoys blasting Pink Floyd, every Sunday at 2 PM.
A customer who bought a condo on the ground floor near the stairs leading to the second floor was worried about the sound of footsteps on the stairs, so I suggested he talk to the occupant above. It turns out that the resident was the president of the Homeowners Association and a stickler for keeping things quiet.
What are the recreational areas, parking and Pet Restrictions?
Find out the hours of use for pools, spas and recreation areas such as tennis or game room and check that the working time schedule.
How do you manage parking for guests, and the number of parking spaces are deeded to each unit? Is it possible to rent an additional parking space if needed?
How much will be charged to replace a lost key to the security gate or club?
How many pets can I have? Are there size restrictions? Are you allowed to bring pets through the lobby on a leash?
Finally, talk to the people who live there. Drive through the parking lot or garage in the evening when the owners are coming home from work. If they hate the homeowners association, they will undoubtedly tell you what is wrong with it. Discover the reasons behind it before before you buy. HOAs have the power to regulate and sanction violations that affect owners financially as never before, so make sure you fully understand what you are getting into before signing on the bottom line.