HOA and Condo Docs
Recently, I’ve been receiving questions from buyers asking about what to look for in homeowners association and condominium documents.
When buying a resale home, townhouse or condo, you have 3 days to review the association documents. Often times, the association documents are hundreds of pages long. Most of the time buyers, do not have the time to review all of documents. Here are a few things to key in on.
One, you want to look at the reserve study. The reserve study is an analysis of repair and replacement costs and provides a funding plan to complete those tasks once needed. You want to make sure the reserve study has been done recently compared to the date of your purchase. You also want to validate that the reserves are not underfunded.
Two, you want to look at the budget trends. You want to see if the fees have been increasing or decreasing. You also want to look to see if there have been any special assessments done. Special assessment occurs when a major repair or replacement is set to be done but the associations reserves do not have enough to cover the cost.
Three, you want to take a look at the recent meeting minutes. These minutes are sometimes missing from the association documents. These meeting minutes are important because it addresses current issues and suggestions being currently brought up. It can forecast changes that haven’t been recorded in budgets, reserve studies or financials.
Other Key Points
A few other key points to look at are the rules for pets, what repairs are covered by the association and the possibility of renting your unit as an investment.
If you have any questions regarding any of this information or if you have a general question about real estate, feel free to comment below, send us an email at [email protected] or give us a call at 571-969-7653.
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