What is HOA?
The condominium property is administered by a homeowners association commonly knows as HOA, which is made up of unit owners. The association may be governed by a board of directors or another elected entity, and it may manage the property on its own or hire a property manager.
The association must enforce any rules it adopts regarding the operation and use of the property. The association is responsible for the maintenance, repair, cleaning and sanitation of the common elements and structural portions of the property. It must also maintain fire, extended coverage, and liability insurance.
The expenses of maintaining and operating the condominium building are paid by the unit owners in the forms of fees and assessments. Both fees and assessments are imposed and collected by the homeowner associations. Recurring fees (HOA fees) are paid by each unit owner. The fees may be due monthly, quarterly, semiannually, or annually, depending on the provisions of the bylaws. If fees are not paid, the association may seek a court-ordered judgment to have the delinquent owner’s unit sold to cover the outstanding amount or place a lien on the property.
What are the assessments?
Assessments are special payments required of unit owners to address some specific expenses, such as a new roof. Assessments are structured like condo fees: Owners of larger units pay proportionately higher assessments than smaller units. The relative ownership shares are established by the developer prior to the sale of the units.
Questions to Ask When Considering a Condo or HOA.
Condominiums, townhomes, and properties located within a homeowner association offer certain perks, but it’s important to consider them in your decision process.
How much storage is available?
Some properties include storage lockers, but there may not be attics or basements to hold extra belongings.
How’s the outdoor space?
Your yard may be smaller than you’d find in a traditional single-family home, so if you like to garden or entertain outdoors, this may not be a good fit. But if you dread yard work, it may be the perfect option.
Are amenities important?
Many properties offer swimming pools, fitness centers, and other facilities that would cost much more in a single-family setting.
Who handles maintenance and security?
Property managers often hire professionals to care for common areas and perform in-unit repairs. Keyed entries and doormen may regulate access to your home when you’re not there (good news if you travel).
Are there required reserve funds and association fees? How much are they?
Although fees generally help pay for amenities and provide savings for future repairs, the HOA or condo board determines these fees, and you’ll have to pay them even if you’re not in favor of the improvements.
What are the association rules?
Although you have a vote on future changes, association rules can dictate how you use your property. Some condos prohibit home-based businesses; others prohibit pets or don’t allow owners to rent out their units. Read the covenants, restrictions, and bylaws carefully before you make an offer.
What’s the average vacancy rate?
It’s never too early to be thinking about resale. The ease of selling your unit may depend on what else is for sale in your building since units are similar.
How many units are owned by investors?
Some lenders require a certain percentage of the building to be owner-occupied and may not be able to offer you financing if the ratio is too low.
Can I meet other residents before making an offer?
You will share space and decision-making duties with your neighbors when part of a homeowner association, so it’s important to make sure you can work together. If possible, try to meet your closest prospective neighbors before you decide on a place.
Is there a right of first refusal?
If the condominium association has a right of first refusal, it means that the owner is required to offer the unit at the same price to the other owners in the condominium or the association before accepting an outside purchase offer. There is usually a timeframe, usually, 30 days is required, however, it is specific to the bylaws and needs to be checked prior to making the decision.
