Friday, November 6, 2015

What Are HOA Docs & Should You Read Them?

Homeowner Association Documents are generally provided to the buyer during escrow for any condo, townhouse, or single family residence, that is governed by an HOA. They include the rules, the board member info, minutes of past meetings, financial standings, insurance, special assessments, etc.

Should you read them? Hell YES!!! Why would someone even consider buying a property that there is an HOA and not know the rules of what you can and cannot do. The reserves the HOA has for future expenses. The minutes of the meetings depict a lot about who is involved and what type of responses happen after a motion is brought up to the board. What exactly does your HOA cover? Water, trash, inside, outside?

When purchasing a condo or townhouse it is imperative that you know who pays for what if a pipe bursts, or the roof leaks.....right? You want to know these things, don't you? Geez, I hope you are all nodding Yes....

I've told buyers that if they aren't going to read them to turn them over and I will! I'm not really supposed to, but damn,....if they aren't, I feel it's my responsibility to look for problems and alert my clients.

The buyers lender looks at financial risks too. Owner vs. Tenant occupancy. Lawsuits against the HOA. How much money is the HOA putting into reserves regularly for future expenses.

Whether that property you are buying is 150k or 1.5m, read your HOA docs. 

It'll save some possible heartache after closing escrow. 

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