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A Condo Buyer’s Guide to HOAs

Shannon Buying a Home , Featured Articles , Real Estate Leave a Comment

If you’re buying a condo, you may be asking yourself, what’s an HOA and what do I need to know about it?

Buying a condo involves a great deal of paper work and a Homeowners Association (HOA). Let’s be honest…You hire a professional,  experienced real estate agent so you don’t have to worry about the details. However, buying a condo requires not only a skilled agent, but you doing your homework. What’s in the fine print can affect your day-to-day life in your new home.

condo lobby the sovenge

Why buy a condo?

  • Security – most buildings have gated or locked entries, some even have professional security staff on site
  • Amenities – fitness center, pool, BBQ area, clubhouse, meeting rooms, tennis courts to name just a few
  • Maintenance – there are several people on site to take care of the landscape, roof, pool, or even the furnace
  • Affordability – traditionally costs less than a single family home, especially in highly desirable areas

Before you decide to purchase a condo, be sure to understand the rules. First and foremost you will be required to join the community homeowners association, HOA, and pay monthly or annul fees.  A homeowners association is generally set up as a non-profit corporation. It is an organization established to manage a private planned community. It is governed by elected board members and a set of rules called bylaws.

Why HOAs are important?

  • Manage legal concerns
  • Manage the property
  • Help maintain order among the residents
  • Help protect the property

What are Bylaws?

Bylaws govern how the HOA operates and contains information needed to efficiently run the organization. Among the things covered by the bylaws are:

  • How often the HOA holds meetings
  • How meetings are conducted
  • The duties of the board of directors
  • How many people sit on the board
  • Membership voting rights

These laws are different from the covenants, conditions, and restrictions, CC&Rs.

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What are CC&Rs?

The covenants, conditions, and restrictions are rules you must follow both inside and outside the building. These rules are recorded in the county records and are legally binding. Therefore, when you purchase a condo, you automatically become a member of the HOA. It is not only important to understand these rules, but also what happens when you violate them. Pay close attention to fines, how rules are added and changed, and when the meetings are held. Also, make sure the condo you are purchasing in in compliance with the HOA rules.

Examples of Rules

  • The color you can paint your front door
  • If you can BBQ on your balcony
  • If you can line dry clothes on your balcony
  • If satellite dishes are permitted
  • Types and sizes of pets
  • If you can rent your unit to another person
  • Restriction on noise levels
  • Your responsibility for maintaining balconies, porches, storage units, and parking spaces.
  • Recreation facility rules: hours of operation at the pool, tennis courts, clubhouse
  • How many guests you can have at these recreational facilities?

 

documents

What to look for in your HOA documents

Fees

The fees differ depending on the amenities and services provided by the building. Listed below are questions to ask about monthly or annual fees.

  • How much are the fees?
  • How are the fees determined?
  • What do the fees include?
  • Will you pay for trash, water, and cable?
  • How often do the fees increase?

Ask for a history of fee increases for the past 10 years. Look for patterns. Be sure to include those fees when creating your new home budget.

Reserve Fund

This fund is used to repair major projects or improvements to the building. Such repairs could include a new roof, elevator, boiler, painting, or garage maintenance. If there is not enough money in the reserve fund, then a “special assessment” will be charged to all the residents. Listed below are valuable factors to consider when reviewing the reserve fund.

  • How large is the reserve fund?
  • A record of special assessments: this will give you an idea of what repairs have been completed.
  • Ask if there has been a study to determine if the reserve is adequate for future projects.

Insurance

Like purchasing a single family home, you will be required by your lender to purchase homeowners insurance for your condo. However, it is just as important that you inquire about insurance on the building such as catastrophe and fire insurance.

What documents to request?

Along with all the rules, regulations, bylaws, and fees you have the right to ask to see the HOA’s financial statements and meeting minutes.

Financials Include

  • Balance sheet: see how the HOA fees are spent
  • Yearly revenue from fees
  • Reserve fund balance
  • Notice of any pending lawsuits
  • Information on recent assessments
  • Percentage of units behind on fees

Meeting Minutes

  • Understand current and past conflicts.
  • How conflicts were handled?
  • Has the HOA ever sued anyone and the results?
  • List of board members
  • Discussions of future special assessments for large projects
  • Any current or anticipated litigation
  • Is there an excessive amount of delinquent HOA dues?

red-flags

Red Flags

Red flags are not always a deal breaker. However, it will open the door for further conversations. Research all the details so you can make informed decisions.

  • Big yearly spikes and dips in spending – these are signs that the building could be in trouble.
  • Little or no reserve funds
  • Emergency borrowing by HOA
  • Frequent “special assessments”
  • Bank owned building
  • A building with a high percentage of renters because owners might not have the same level of commitment as you to maintain the building. Additionally a high percentage of non-owner occupied units may mean it’s difficult for you to obtain financing for a purchase.
  • When HOA are under managed – this might mean the owners do not take an interest in the building.
  • Lack of people interested in sitting on the board – again little interest in maintain the building.

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Buying a condo is a bit more complex than buying a single family home. It is important you take the time to get to know and understand your HOA. Besides reading and understanding all the documents, it is extremely important that you talk to other residents. They will give you first hand information about living in the building and the homeowners association. You should also talk to the board members and get a feel for their different personalities. Lastly, do not forget to walk around the building and inspect all the public areas. Make sure it meets your standards and quality of life.

If you’re considering buying a condo in Long Beach, Lakewood, Signal Hill, Seal Beach, Cypress, Los Alamitos, Rossmoor, Huntington Beach, or surrounding communities, we’d be happy to help!

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Condos for Sale in Long Beach

  1. 0 beds, 1 full bath
    Home size: 534 sq ft
    Lot size: 7,459 sqft
    Year built: 1956
    Days on market: 1
  2. 2 beds, 2 full baths
    Home size: 1,120 sq ft
    Lot size: 25,779 sqft
    Year built: 1966
    Parking spots: 2
    Days on market: 1
  3. 2 beds, 2 full baths
    Home size: 842 sq ft
    Lot size: 38,666 sqft
    Year built: 1988
    Parking spots: 4
    Days on market: 1
  4. 2 beds, 2 full baths
    Home size: 850 sq ft
    Lot size: 6,999 sqft
    Year built: 1987
    Parking spots: 2
    Days on market: 1
  5. 2 beds, 2 full baths
    Home size: 920 sq ft
    Lot size: 34,912 sqft
    Year built: 1990
    Parking spots: 2
    Days on market: 1
  6. 0 beds, 1 full bath
    Home size: 1,463 sq ft
    Year built: 1929
    Parking spots: 2
    Days on market: 2
  7. 2 beds, 1 full, 1 three-quarter baths
    Home size: 1,050 sq ft
    Lot size: 12,952 sqft
    Year built: 1969
    Parking spots: 2
    Days on market: 2
  8. 1 bed, 1 full bath
    Home size: 776 sq ft
    Lot size: 13,503 sqft
    Year built: 1968
    Parking spots: 2
    Days on market: 2
  9. 3 beds, 1 full, 1 three-quarter baths
    Home size: 1,617 sq ft
    Lot size: 9,856 sqft
    Year built: 1954
    Parking spots: 1
    Days on market: 2
  10. 1 bed, 1 full bath
    Home size: 700 sq ft
    Lot size: 5.06 ac
    Year built: 1990
    Parking spots: 2
    Days on market: 2
  11. 1 bed, 1 full bath
    Home size: 693 sq ft
    Lot size: 12.83 ac
    Year built: 1970
    Parking spots: 2
    Days on market: 2
  12. 1 bed, 1 full bath
    Home size: 642 sq ft
    Lot size: 20,256 sqft
    Year built: 1962
    Parking spots: 2
    Days on market: 2
  13. 2 beds, 1 full, 1 half baths
    Home size: 964 sq ft
    Lot size: 7,466 sqft
    Year built: 1981
    Parking spots: 4
    Days on market: 2
  14. 1 bed, 1 full bath
    Home size: 711 sq ft
    Lot size: 33,042 sqft
    Year built: 1973
    Parking spots: 2
    Days on market: 2
  15. 3 beds, 2 full baths
    Home size: 1,330 sq ft
    Lot size: 37,471 sqft
    Year built: 2001
    Parking spots: 4
    Days on market: 3
  16. 2 beds, 2 full baths
    Home size: 1,148 sq ft
    Lot size: 15,011 sqft
    Year built: 1966
    Parking spots: 2
    Days on market: 4
  17. 2 beds, 2 full baths
    Home size: 912 sq ft
    Lot size: 35,003 sqft
    Year built: 1971
    Parking spots: 2
    Days on market: 4
  18. 2 beds, 2 full baths
    Home size: 1,660 sq ft
    Lot size: 33,443 sqft
    Year built: 2007
    Parking spots: 4
    Days on market: 4
  19. 3 beds, 2 full, 1 half baths
    Home size: 1,812 sq ft
    Lot size: 3.80 ac
    Year built: 2005
    Parking spots: 4
    Days on market: 4
  20. 1 bed, 1 three-quarter bath
    Home size: 471 sq ft
    Year built: 1990
    Parking spots: 2
    Days on market: 5
  21. 2 beds, 2 full baths
    Home size: 1,290 sq ft
    Year built: 1984
    Parking spots: 4
    Days on market: 5
  22. 2 beds, 2 full baths
    Home size: 1,660 sq ft
    Year built: 2007
    Parking spots: 4
    Days on market: 5
  23. 2 beds, 3 full, 1 quarter baths
    Home size: 1,083 sq ft
    Lot size: 14,763 sqft
    Year built: 1982
    Parking spots: 4
    Days on market: 5
  24. 0 beds, 1 full bath
    Home size: 477 sq ft
    Lot size: 22,488 sqft
    Year built: 1925
    Days on market: 6
  25. 1 bed, 1 full bath
    Home size: 722 sq ft
    Lot size: 16,540 sqft
    Year built: 1958
    Days on market: 6
  26. 2 beds, 2 full baths
    Home size: 1,214 sq ft
    Lot size: 14,243 sqft
    Year built: 1953
    Parking spots: 2
    Days on market: 7
  27. 1 bed, 1 full bath
    Home size: 690 sq ft
    Lot size: 1.31 ac
    Year built: 1973
    Parking spots: 2
    Days on market: 8
  28. 2 beds, 2 full baths
    Home size: 820 sq ft
    Lot size: 7,421 sqft
    Year built: 1989
    Parking spots: 2
    Days on market: 9
  29. 1 bed, 1 full bath
    Home size: 667 sq ft
    Lot size: 23,199 sqft
    Year built: 1972
    Parking spots: 2
    Days on market: 9
  30. 2 beds, 2 full baths
    Home size: 908 sq ft
    Lot size: 1.25 ac
    Year built: 1991
    Parking spots: 4
    Days on market: 10

See all Real estate in the city of Long Beach.
(all data current as of 4/30/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Condos for Sale in Signal Hill

  1. 1 bed, 1 full bath
    Home size: 837 sq ft
    Lot size: 7.41 ac
    Year built: 1980
    Parking spots: 4
    Days on market: 1
  2. 2 beds, 2 full baths
    Home size: 1,264 sq ft
    Lot size: 35,098 sqft
    Year built: 1980
    Parking spots: 4
    Days on market: 1
  3. 2 beds, 2 full baths
    Home size: 1,280 sq ft
    Lot size: 35,276 sqft
    Year built: 1981
    Parking spots: 4
    Days on market: 2
  4. 2 beds, 2 full baths
    Home size: 1,060 sq ft
    Lot size: 7.41 ac
    Year built: 1980
    Parking spots: 4
    Days on market: 3
  5. 2 beds, 2 full baths
    Home size: 945 sq ft
    Lot size: 7,261 sqft
    Year built: 1977
    Parking spots: 4
    Days on market: 3
  6. 2 beds, 2 full baths
    Home size: 1,736 sq ft
    Lot size: 14,201 sqft
    Year built: 1980
    Parking spots: 4
    Days on market: 5
  7. 2 beds, 2 full baths
    Home size: 1,673 sq ft
    Lot size: 26,617 sqft
    Year built: 1978
    Days on market: 10
  8. 2 beds, 2 full baths
    Home size: 1,530 sq ft
    Lot size: 38,834 sqft
    Year built: 1980
    Parking spots: 4
    Days on market: 13
  9. 2 beds, 2 full, 1 half baths
    Home size: 1,870 sq ft
    Lot size: 15,324 sqft
    Year built: 2013
    Parking spots: 4
    Days on market: 23
  10. 3 beds, 2 full baths
    Home size: 1,207 sq ft
    Lot size: 27,112 sqft
    Year built: 1975
    Parking spots: 2
    Days on market: 30
  11. 2 beds, 2 full baths
    Home size: 1,564 sq ft
    Lot size: 40,063 sqft
    Year built: 1984
    Parking spots: 2
    Days on market: 34
  12. 2 beds, 3 full baths
    Home size: 1,222 sq ft
    Lot size: 17,998 sqft
    Year built: 1991
    Days on market: 72
  13. 2 beds, 2 full baths
    Home size: 1,522 sq ft
    Lot size: 38,834 sqft
    Year built: 1980
    Parking spots: 4
    Days on market: 105

See all Real estate in the city of Signal Hill.
(all data current as of 4/30/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Condos for Sale in Lakewood

  1. 3 beds, 1 full, 1 half baths
    Home size: 1,175 sq ft
    Lot size: 2.08 ac
    Year built: 1984
    Parking spots: 4
    Days on market: 69

See all Real estate in the city of Lakewood.
(all data current as of 4/30/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Condos for Sale in Seal Beach

  1. 3 beds, 2 full baths
    Home size: 1,221 sq ft
    Year built: 1969
    Parking spots: 2
    Days on market: 1
  2. 2 beds, 1 full bath
    Home size: 1,000 sq ft
    Parking spots: 1
    Days on market: 18
  3. 3 beds, 1 full, 1 three-quarter baths
    Home size: 1,221 sq ft
    Year built: 1969
    Parking spots: 1
    Days on market: 44
  4. 3 beds, 3 full baths
    Home size: 2,299 sq ft
    Year built: 1975
    Parking spots: 2
    Days on market: 58

See all Real estate in the city of Seal Beach.
(all data current as of 4/30/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Condos for Sale in Cypress

  1. 2 beds, 2 full baths
    Home size: 819 sq ft
    Year built: 1991
    Parking spots: 4
    Days on market: 4
  2. 2 beds, 1 full, 1 half baths
    Home size: 1,164 sq ft
    Year built: 1979
    Parking spots: 4
    Days on market: 6
  3. 2 beds, 2 full baths
    Home size: 947 sq ft
    Year built: 1974
    Parking spots: 4
    Days on market: 6
  4. 3 beds, 1 full, 1 three-quarter baths
    Home size: 1,032 sq ft
    Lot size: 1,796 sqft
    Year built: 1973
    Parking spots: 4
    Days on market: 8
  5. 2 beds, 1 full, 1 half baths
    Home size: 1,032 sq ft
    Lot size: 851 sqft
    Year built: 1964
    Parking spots: 3
    Days on market: 18
  6. 3 beds, 2 full, 1 half baths
    Home size: 1,676 sq ft
    Year built: 2011
    Parking spots: 4
    Days on market: 26
  7. 2 beds, 3 full baths
    Home size: 1,689 sq ft
    Year built: 2007
    Parking spots: 2
    Days on market: 32
  8. 2 beds, 1 full, 1 half baths
    Home size: 1,142 sq ft
    Lot size: 2,472 sqft
    Year built: 1975
    Parking spots: 2
    Days on market: 49

See all Real estate in the city of Cypress.
(all data current as of 4/30/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Condos for Sale in Los Alamitos

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Condos for Sale in Rossmoor

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Condos for Sale in Huntington Beach

  1. 3 beds, 1 full, 1 half baths
    Home size: 1,100 sq ft
    Lot size: 880 sqft
    Year built: 1963
    Days on market: 2
  2. 1 bed, 1 full bath
    Home size: 478 sq ft
    Lot size: 5.00 ac
    Year built: 1971
    Parking spots: 248
    Days on market: 2
  3. 2 beds, 2 full baths
    Home size: 1,104 sq ft
    Lot size: 2,000 sqft
    Year built: 1988
    Parking spots: 2
    Days on market: 2
  4. 0 beds, 1 full bath
    Home size: 500 sq ft
    Year built: 1985
    Parking spots: 2
    Days on market: 2
  5. 2 beds, 1 full, 1 half baths
    Home size: 1,054 sq ft
    Year built: 1971
    Parking spots: 1
    Days on market: 3
  6. 4 beds, 2 full, 2 three-quarter, 1 half baths
    Home size: 3,573 sq ft
    Year built: 2014
    Parking spots: 6
    Days on market: 3
  7. 2 beds, 2 full baths
    Home size: 1,046 sq ft
    Year built: 1987
    Parking spots: 4
    Days on market: 3
  8. 2 beds, 1 full bath
    Home size: 1,120 sq ft
    Year built: 1984
    Parking spots: 2
    Days on market: 3
  9. 1 bed, 1 full bath
    Home size: 810 sq ft
    Lot size: 1,000 sqft
    Year built: 1976
    Parking spots: 2
    Days on market: 5
  10. 1 bed, 1 full bath
    Home size: 818 sq ft
    Year built: 1972
    Parking spots: 2
    Days on market: 5
  11. 1 bed, 1 full bath
    Home size: 668 sq ft
    Year built: 1974
    Parking spots: 1
    Days on market: 5
  12. 1 bed, 1 full bath
    Home size: 750 sq ft
    Year built: 1983
    Parking spots: 2
    Days on market: 9
  13. 1 bed, 1 full bath
    Home size: 561 sq ft
    Year built: 1980
    Parking spots: 2
    Days on market: 10
  14. 1 bed, 1 full bath
    Home size: 924 sq ft
    Lot size: 924 sqft
    Year built: 1983
    Parking spots: 3
    Days on market: 10
  15. 3 beds, 2 full, 1 half baths
    Home size: 1,734 sq ft
    Year built: 1988
    Parking spots: 4
    Days on market: 10
  16. 2 beds, 2 full, 1 half baths
    Home size: 2,132 sq ft
    Lot size: 1,500 sqft
    Year built: 1985
    Parking spots: 4
    Days on market: 11
  17. 2 beds, 2 full, 1 half baths
    Home size: 1,200 sq ft
    Lot size: 10,000 sqft
    Year built: 1989
    Parking spots: 4
    Days on market: 11
  18. 2 beds, 1 full bath
    Home size: 799 sq ft
    Lot size: 1 sqft
    Year built: 1971
    Parking spots: 2
    Days on market: 13
  19. 2 beds, 2 full baths
    Home size: 1,033 sq ft
    Lot size: 1,033 sqft
    Year built: 1972
    Parking spots: 2
    Days on market: 13
  20. 1 bed, 1 full bath
    Home size: 600 sq ft
    Lot size: 800 sqft
    Year built: 1963
    Parking spots: 1
    Days on market: 16
  21. 2 beds, 1 full bath
    Home size: 995 sq ft
    Year built: 1989
    Parking spots: 4
    Days on market: 17
  22. 2 beds, 2 full baths
    Home size: 1,038 sq ft
    Year built: 1984
    Parking spots: 3
    Days on market: 19
  23. 1 bed, 1 full bath
    Home size: 807 sq ft
    Year built: 1975
    Parking spots: 3
    Days on market: 20
  24. 2 beds, 2 full baths
    Home size: 1,149 sq ft
    Lot size: 1,000 sqft
    Year built: 1987
    Parking spots: 2
    Days on market: 21
  25. 2 beds, 2 full baths
    Home size: 1,149 sq ft
    Lot size: 1,149 sqft
    Year built: 1983
    Parking spots: 3
    Days on market: 22
  26. 2 beds, 1 full bath
    Home size: 1,844 sq ft
    Lot size: 1,307 sqft
    Year built: 1976
    Parking spots: 2
    Days on market: 24
  27. 1 bed, 1 full bath
    Home size: 729 sq ft
    Year built: 1982
    Parking spots: 1
    Days on market: 24
  28. 3 beds, 2 full baths
    Home size: 1,485 sq ft
    Year built: 1993
    Parking spots: 4
    Days on market: 27
  29. 2 beds, 2 full baths
    Home size: 1,164 sq ft
    Year built: 1984
    Parking spots: 2
    Days on market: 27
  30. 2 beds, 1 full, 1 three-quarter baths
    Home size: 1,216 sq ft
    Year built: 1981
    Parking spots: 4
    Days on market: 29

See all Real estate in the city of Huntington Beach.
(all data current as of 4/30/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

 

 

 

 

 

 

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