While not all housing developments will have a Home Owner’s Association (HOA), most condominiums and new planned housing communities will have rules and regulations you’ll need to abide by. And each HOA will have different policies. So, if you’re thinking of buying a home in an HOA-managed community, it’s important to find out the answers to the following questions, and fully understand all the rules, before you make the decision to buy:

• What are the HOA fees and special assessment fees, and what do they cover?
• What are the HOA’s covenants, conditions and restrictions (CC&R)?
• What is the HOA’s financial situation?

You can ask the seller or builder to provide you with the rules and regulations. If the seller doesn’t have this information, ask them for the name of the property management company who oversees the community. You can contact them to get the CC&R.

HOA Fees and Special Assessment Fees

The HOA and special assessment fees will vary depending upon the community. In general, these fees may cover:

• Lawn care for general areas.
• Maintenance and repairs. This includes pools, fitness centers and general use buildings. In condominiums, this also would include roofing and exterior maintenance to the condominium buildings, too.
• City services such as water, sewage and trash removal.
• Insurance for outside the condominium building and common areas like pools, playgrounds and club houses.
• Snow removal.
• Pest control.

Additionally, you need to be aware that HOA fees may increase each year as the cost for these services go up.

HOA CC&R

The CC&R documents tell you how the HOA operates and give you the specific rules and regulations you’ll need to live by within the community. These rules may cover things like pets, parking, common space usage, and short-term rentals. These documents will state the consequences if you disobey the rules such as fines, forced compliance or legal action. Additionally the CC&R will outline procedures for changing the rules.

HOA Financial Statements

The HOA’s financial statements are the most important documents to review in order to ensure the association is financially sound. These statements should tell you if the HOA:

• Is collecting enough money to cover its bills.
• Has homeowners who are delinquent in paying their dues.
• Is saving enough money in reserves for emergencies or long-term repairs.
• Has any capital improvements planned.
• Is being or has been sued.

Also, these statements can help you determine the HOA’s history for increasing the dues.

If you have any questions or concerns regarding the community’s HOA documents, contact the property management company for clarification. Also you may want to talk with a real estate lawyer.

During the home buying process, there are many documents you’ll need to understand, especially those involving your home loan. The Senior Mortgage Specialists at Grandview Lending are here to answer your questions and help you find the home loan that’s right for your needs. Call us today at 866.690.4920!