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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. 2 beds, 2 full baths
    Home size: 830 sq ft
    Lot size: 6,001 sqft
    Year built: 1987
    Days on market: 2
  2. 2 beds, 2 full baths
    Home size: 1,263 sq ft
    Lot size: 3.31 ac
    Year built: 1976
    Parking spots: 1
    Days on market: 3
  3. 1 bed, 1 full bath
    Home size: 750 sq ft
    Lot size: 34,315 sqft
    Year built: 2008
    Parking spots: 2
    Days on market: 3
  4. 1 bed, 1 full bath
    Home size: 644 sq ft
    Lot size: 7,571 sqft
    Year built: 1972
    Parking spots: 1
    Days on market: 3
  5. 2 beds, 1 full bath
    Home size: 790 sq ft
    Lot size: 33,394 sqft
    Year built: 1976
    Parking spots: 1
    Days on market: 4
  6. 2 beds, 1 full, 1 three-quarter, 1 half baths
    Home size: 1,716 sq ft
    Lot size: 15,092 sqft
    Year built: 1966
    Parking spots: 2
    Days on market: 4
  7. 2 beds, 2 full, 1 half baths
    Home size: 1,330 sq ft
    Lot size: 1.35 ac
    Year built: 1990
    Parking spots: 2
    Days on market: 4
  8. 2 beds, 1 full bath
    Home size: 1,164 sq ft
    Lot size: 1.83 ac
    Year built: 1988
    Parking spots: 1
    Days on market: 4
  9. 1 bed, 1 full bath
    Home size: 471 sq ft
    Lot size: 34,934 sqft
    Year built: 1990
    Parking spots: 1
    Days on market: 5
  10. 1 bed, 1 full bath
    Home size: 700 sq ft
    Lot size: 5.06 ac
    Year built: 1990
    Parking spots: 1
    Days on market: 5
  11. 2 beds, 2 full baths
    Home size: 1,052 sq ft
    Lot size: 25,955 sqft
    Year built: 1979
    Parking spots: 2
    Days on market: 5
  12. 2 beds, 2 full baths
    Home size: 887 sq ft
    Lot size: 21,509 sqft
    Year built: 1990
    Parking spots: 2
    Days on market: 5
  13. 1 bed, 2 full baths
    Home size: 880 sq ft
    Lot size: 33,206 sqft
    Year built: 1965
    Parking spots: 1
    Days on market: 5
  14. 2 beds, 2 full baths
    Home size: 1,034 sq ft
    Lot size: 10,650 sqft
    Year built: 1971
    Parking spots: 1
    Days on market: 5
  15. 1 bed, 1 full bath
    Home size: 586 sq ft
    Lot size: 14,992 sqft
    Year built: 1957
    Days on market: 5
  16. 1 bed, 1 full bath
    Home size: 880 sq ft
    Lot size: 33,206 sqft
    Year built: 1965
    Parking spots: 1
    Days on market: 5
  17. 1 bed, 1 full bath
    Home size: 600 sq ft
    Lot size: 22,564 sqft
    Year built: 1958
    Days on market: 5
  18. 1 bed, 1 full bath
    Home size: 590 sq ft
    Lot size: 3.30 ac
    Year built: 1969
    Parking spots: 1
    Days on market: 5
  19. 1 bed, 1 full, 1 half baths
    Home size: 980 sq ft
    Lot size: 22.47 ac
    Year built: 1974
    Parking spots: 2
    Days on market: 6
  20. 2 beds, 2 full baths
    Home size: 1,080 sq ft
    Lot size: 33,206 sqft
    Year built: 1965
    Parking spots: 2
    Days on market: 6
  21. 1 bed, 1 full bath
    Home size: 732 sq ft
    Lot size: 1.31 ac
    Year built: 1973
    Days on market: 6
  22. 3 beds, 2 full baths
    Home size: 1,469 sq ft
    Lot size: 1.44 ac
    Year built: 1983
    Parking spots: 3
    Days on market: 6
  23. 2 beds, 2 full baths
    Home size: 907 sq ft
    Lot size: 1.25 ac
    Year built: 1991
    Parking spots: 2
    Days on market: 6
  24. 1 bed, 1 full bath
    Home size: 585 sq ft
    Lot size: 5,252 sqft
    Year built: 1957
    Parking spots: 1
    Days on market: 6
  25. 3 beds, 3 full baths
    Home size: 1,788 sq ft
    Lot size: 1.59 ac
    Year built: 1992
    Parking spots: 2
    Days on market: 7
  26. 2 beds, 2 full baths
    Home size: 907 sq ft
    Lot size: 1.25 ac
    Year built: 1991
    Days on market: 7
  27. 2 beds, 2 full baths
    Home size: 850 sq ft
    Lot size: 13,484 sqft
    Year built: 1987
    Parking spots: 1
    Days on market: 8
  28. 1 bed, 1 full bath
    Home size: 759 sq ft
    Year built: 1973
    Parking spots: 1
    Days on market: 8
  29. 2 beds, 2 full baths
    Home size: 1,660 sq ft
    Year built: 2007
    Parking spots: 2
    Days on market: 9
  30. 3 beds, 3 full baths
    Home size: 1,570 sq ft
    Lot size: 34,315 sqft
    Year built: 2008
    Parking spots: 2
    Days on market: 9

See all Real estate in the city of Long Beach.
(all data current as of 3/27/2017)

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

Condos for Sale in Signal Hill

  1. 3 beds, 3 full baths
    Home size: 1,436 sq ft
    Lot size: 1.28 ac
    Year built: 1980
    Parking spots: 4
    Days on market: 1
  2. 3 beds, 2 full, 1 three-quarter baths
    Home size: 1,482 sq ft
    Lot size: 23,927 sqft
    Year built: 1980
    Parking spots: 2
    Days on market: 5
  3. 2 beds, 2 full baths
    Home size: 1,171 sq ft
    Lot size: 1.23 ac
    Year built: 1983
    Parking spots: 2
    Days on market: 31
  4. 2 beds, 3 full baths
    Home size: 1,222 sq ft
    Lot size: 17,998 sqft
    Year built: 1991
    Days on market: 38
  5. 2 beds, 2 full baths
    Home size: 1,522 sq ft
    Lot size: 38,834 sqft
    Year built: 1980
    Parking spots: 2
    Days on market: 71

See all Real estate in the city of Signal Hill.
(all data current as of 3/27/2017)

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

Condos for Sale in Lakewood

  1. 1 bed, 1 full bath
    Home size: 984 sq ft
    Lot size: 771 sqft
    Year built: 1978
    Parking spots: 1
    Days on market: 4
  2. 3 beds, 2 full baths
    Home size: 1,110 sq ft
    Lot size: 1.44 ac
    Year built: 1984
    Days on market: 131

See all Real estate in the city of Lakewood.
(all data current as of 3/27/2017)

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

Condos for Sale in Seal Beach

  1. 3 beds, 1 full, 1 three-quarter baths
    Home size: 1,221 sq ft
    Year built: 1969
    Parking spots: 1
    Days on market: 10
  2. 2 beds, 2 full baths
    Home size: 1,178 sq ft
    Year built: 1974
    Parking spots: 1
    Days on market: 10
  3. 2 beds, 2 full baths
    Home size: 1,101 sq ft
    Year built: 1974
    Parking spots: 2
    Days on market: 13
  4. 2 beds, 2 full baths
    Home size: 1,056 sq ft
    Year built: 1982
    Parking spots: 1
    Days on market: 14
  5. 3 beds, 2 full baths
    Home size: 1,234 sq ft
    Lot size: 9.24 ac
    Year built: 1968
    Parking spots: 2
    Days on market: 19
  6. 3 beds, 3 full baths
    Home size: 2,299 sq ft
    Year built: 1975
    Parking spots: 2
    Days on market: 23
  7. 3 beds, 2 full, 1 half baths
    Home size: 1,450 sq ft
    Lot size: 1,500 sqft
    Year built: 1978
    Parking spots: 2
    Days on market: 24

See all Real estate in the city of Seal Beach.
(all data current as of 3/27/2017)

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

Condos for Sale in Cypress

  1. 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: 15
  2. 5 beds, 2 full, 1 three-quarter baths
    Home size: 2,021 sq ft
    Lot size: 1,820 sqft
    Year built: 2007
    Parking spots: 2
    Days on market: 74
  3. 4 beds, 3 full baths
    Home size: 1,938 sq ft
    Lot size: 1,925 sqft
    Year built: 2007
    Parking spots: 2
    Days on market: 110

See all Real estate in the city of Cypress.
(all data current as of 3/27/2017)

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

Condos for Sale in Los Alamitos

  1. 2 beds, 1 full bath
    Home size: 911 sq ft
    Lot size: 911 sqft
    Year built: 1983
    Parking spots: 2
    Days on market: 14

See all Real estate in the city of Los Alamitos.
(all data current as of 3/27/2017)

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

Condos for Sale in Rossmoor

Sorry, but we couldn't find any results in the MLS that match the specified search criteria.

Condos for Sale in Huntington Beach

  1. 1 bed, 1 full, 1 quarter baths
    Home size: 765 sq ft
    Year built: 1983
    Days on market: 1
  2. 2 beds, 2 full baths
    Home size: 1,072 sq ft
    Year built: 1977
    Parking spots: 1
    Days on market: 2
  3. 2 beds, 2 full, 1 half baths
    Home size: 1,438 sq ft
    Year built: 1981
    Parking spots: 1
    Days on market: 2
  4. 2 beds, 1 full, 1 half baths
    Home size: 968 sq ft
    Year built: 1967
    Parking spots: 1
    Days on market: 3
  5. 3 beds, 3 full baths
    Home size: 1,580 sq ft
    Lot size: 1,716 sqft
    Year built: 1980
    Parking spots: 2
    Days on market: 3
  6. 3 beds, 2 full baths
    Home size: 1,360 sq ft
    Lot size: 1,045 sqft
    Year built: 1973
    Parking spots: 2
    Days on market: 4
  7. 3 beds, 2 full, 1 half baths
    Home size: 1,740 sq ft
    Year built: 1980
    Days on market: 5
  8. 3 beds, 2 full, 1 half baths
    Home size: 2,409 sq ft
    Year built: 2001
    Parking spots: 2
    Days on market: 5
  9. 2 beds, 1 full, 1 three-quarter baths
    Home size: 1,064 sq ft
    Lot size: 1,064 sqft
    Year built: 1980
    Parking spots: 1
    Days on market: 8
  10. 2 beds, 2 full baths
    Home size: 923 sq ft
    Year built: 1983
    Days on market: 8
  11. 2 beds, 2 full, 1 half baths
    Home size: 1,174 sq ft
    Lot size: 9,999 sqft
    Year built: 1989
    Parking spots: 2
    Days on market: 9
  12. 2 beds, 1 full bath
    Home size: 835 sq ft
    Year built: 1971
    Parking spots: 1
    Days on market: 10
  13. 2 beds, 2 full, 1 half baths
    Home size: 1,647 sq ft
    Lot size: 1,000 sqft
    Year built: 1999
    Parking spots: 2
    Days on market: 10
  14. 3 beds, 1 full, 1 half baths
    Home size: 1,508 sq ft
    Lot size: 1,562 sqft
    Year built: 1973
    Parking spots: 2
    Days on market: 11
  15. 2 beds, 2 full baths
    Home size: 962 sq ft
    Lot size: 9,999 sqft
    Year built: 1989
    Parking spots: 2
    Days on market: 11
  16. 3 beds, 2 full baths
    Home size: 1,190 sq ft
    Year built: 1978
    Parking spots: 1
    Days on market: 12
  17. 1 bed, 1 full, 1 half baths
    Home size: 1,012 sq ft
    Year built: 1975
    Parking spots: 1
    Days on market: 18
  18. 3 beds, 2 full, 1 half baths
    Home size: 1,875 sq ft
    Lot size: 2,500 sqft
    Year built: 2012
    Parking spots: 2
    Days on market: 19
  19. 0 beds, 1 full bath
    Home size: 600 sq ft
    Lot size: 1,111 sqft
    Year built: 1988
    Parking spots: 1
    Days on market: 19
  20. 2 beds, 1 full bath
    Home size: 837 sq ft
    Year built: 1973
    Parking spots: 1
    Days on market: 19
  21. 1 bed, 1 full bath
    Home size: 843 sq ft
    Lot size: 843 sqft
    Year built: 1980
    Parking spots: 1
    Days on market: 19
  22. 4 beds, 3 full, 1 half baths
    Home size: 2,475 sq ft
    Lot size: 100 sqft
    Year built: 1987
    Parking spots: 3
    Days on market: 20
  23. 2 beds, 2 full baths
    Home size: 1,021 sq ft
    Year built: 1974
    Parking spots: 2
    Days on market: 21
  24. 2 beds, 1 full, 1 three-quarter baths
    Home size: 1,055 sq ft
    Lot size: 1,100 sqft
    Year built: 1974
    Parking spots: 1
    Days on market: 25
  25. 1 bed, 1 full bath
    Home size: 668 sq ft
    Year built: 1971
    Parking spots: 1
    Days on market: 30
  26. 2 beds, 2 full, 1 half baths
    Home size: 2,252 sq ft
    Lot size: 1,536 sqft
    Year built: 1990
    Parking spots: 2
    Days on market: 31
  27. 2 beds, 1 full, 1 three-quarter baths
    Home size: 1,366 sq ft
    Year built: 1983
    Parking spots: 1
    Days on market: 32
  28. 1 bed, 1 full bath
    Home size: 716 sq ft
    Year built: 1978
    Parking spots: 1
    Days on market: 36
  29. 2 beds, 1 full, 1 three-quarter baths
    Home size: 1,104 sq ft
    Year built: 1986
    Parking spots: 1
    Days on market: 38
  30. 2 beds, 2 full baths
    Home size: 1,072 sq ft
    Year built: 1985
    Parking spots: 1
    Days on market: 38

See all Real estate in the city of Huntington Beach.
(all data current as of 3/27/2017)

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

 

 

 

 

 

 

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