Buying a new home comes with lots of questions such as whether or not to buy a house or a condo, whether to buy in a community that has an HOA, should you pay HOA fees monthly or yearly and so on. However, if you have found a home that is part of a homeowners association and you’ve determined whether or not you have the option to pay the HOA fees monthly or yearly, the extent of your questions shouldn’t stop there, if you want to avoid getting into something that could quite possibly ruin your lifestyle and prevent you from doing the things you want to do. Therefore, we are going to give you 10 questions you must ask before buying into an HOA. Asking these 10 questions could help keep you from making the mistake of a lifetime.
1. Do You Charge HOA Dues?
Most homeowners associations do charge HOA fees monthly or yearly. Additionally, if they quote you what seems to be a fee that’s at the higher end of the scale, that isn’t necessarily a bad thing. Â In fact, you should be a bit wary of an HOA that charges an extremely low fee as that might mean they don’t keep enough money in their reserve account for emergencies, which could ultimately lead to them having to impose a special assessment.
2. Â How Often Do You Impose Special Assessments?
A special assessment is what the HOA will charge all current residents of the community, if something on the property needs to be repaired or replaced and there’s not enough money in their reserve account to cover it. This could be caused by a poorly managed HOA or be due to some sort of natural disaster or the like. Knowing how often they impose special assessments will help you determine which of the two is the cause. Of course you need to take into account whether or not there have been a rash of natural disasters or the like within any given timeframe as well.
3. How Much Money Do You Allocate To Your Reserve Fund?
The answer to this question will vary depending on the age of the community and if they’ve kept up with the improvements year over year. Therefore, you should ask to see proof of how much money is currently in their reserves and what amount is supposed to be in their reserves. The closer it is to full funding, the better. For example, if it has 70 percent or more, that’s marginal. However, if it has 40 percent or less, that’s extremely risky and could spell disaster if something happens that would require a hefty repair.
4.  How Many of the Units Are Owner Occupied and How Many Are Rented Out?
Having too many renters in a community might create an atmosphere of traffic, trash and noise that most homeowners try to avoid. For example, if the homes on each side of you are rentals, you could have strange people (who probably haven’t been background checked) going in and out of those homes year round. Do you really want strangers who could potentially be dangerous around you and your family 365 days per year? Therefore, we recommend that if the community is more than 10 percent rentals, then you should probably pass on living there.
5. What Do You Consider a Violation?
You should request a copy of the communities rules and regulations. Look to see if there is anything there you don’t agree with or feel you couldn’t abide by. Then ask to see a copy of the HOA’s meeting minutes. This will give you a good idea about how picky they are about violations and whether or not you feel they go about enforcing them fairly. It will also show you trends of any potential problems within the community.
6. Do You Have Any Pet Restrictions?
No matter what the HOA rules and regulations say, you should always confirm whether or not they allow pets and if they have any type of pet restrictions. Some HOA’s don’t allow large dogs or certain breeds of dogs and this policy can change many times throughout the course of history. Therefore, ask for confirmation and get it in writing, if you have a pet. And never assume that because you saw a large dog being walked in the community that it’s probably an accepted rule, because as we mentioned above, the rules could quite possibly change many times over the course of history. The last thing you want is to buy a home in an HOA then have to move or get rid of your beloved pet just because of a strict HOA rule.
7. Do You Allow Fencing and Other Modifications?
Some HOA’s don’t allow fencing of any kind and others do allow fencing; however, they have restrictions as to what types of fencing they do allow. Another reason to ask this question is if you have pets and/or kids and were counting on putting up a fence to keep them contained, you might be in for a big surprise and some major inconveniences, if you learn that fencing is not allowed. The same goes for any other type of property modifications as most HOA’s have certain standards they do and don’t allow, which could be just about anything from paint colors, to holiday decor, what’s allowed in your yard and so on.
8. What Is the Current Occupancy of the Community?
If the community is nearly full, that’s a good sign. It’s also a good indication that people like living there and that it’s probably being run properly. Another reason you need to know this is because if a special assessment is required, it will be divided amongst the current residents. That means if the special assessment is $10,000 and there are only 50 out of 100 potential residents living there, you will end up paying more than you would have if the community was full or nearly full.
9. What Improvements Are You Planning and Do You Currently Have Enough Money To Pay for Them?
This will tell you if the community has a preventive maintenance plan in place and if they routinely perform the necessary upgrades to keep the community amenities and common areas in good working order. Then you should tour the community and look for any signs of neglect. For example, are the sidewalks in good condition? Does the landscaping look well-manicured? Does the overall community look well cared for?
10. Do the Current Residents Like Living There?
Talking with as many current residents as possible is sometimes the best way to get a good feel for the community. Ask them if they like living there, if there have been any problems and how often people come and go. You can also ask them how they feel about the management. Most people are happy to talk with you about the community and you will probably end up with more information than you ever wanted to know. Just make sure you talk with more than just one or two people, because there are some people who are never happy with anything, no matter how great it is.
2 Point Highlight
1. Buying a new home comes with lots of questions such as whether or not to buy a house or a condo, whether to buy in a community that has an HOA, should you pay HOA fees monthly or yearly and so on.
2. We are going to give you 10 questions you must ask before buying into an HOA.
