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Old 06-20-2010, 11:08 AM
 
3,777 posts, read 7,167,630 times
Reputation: 4134

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Ask to see the CC&Rs, the rules and regulations, the bylaws, the most recent financial statement, the current budget, the current reserve study, minutes from the most recent annual meeting, and several months of minutes.

When reading the minutes, check these things:
-Does the board have minutes from every month? If not, they may be having a hard time getting a quorum. Or, this could indicate that the secretary is not doing a good job - or that there is a problem with the management company.
-Do the same items appear in the minutes month after month? If so, either the board or the management company is not following through.
-Is the board dealing mostly with rules issues, financial issues, or maintenance issues?
-Are there signs of quarreling among homeowners?

From the financial information:
-Is money being added to the reserve account regularly? Is this the amount the reserve study recommended?
-What components are included in the reserve study? Does it seem like anything is missing? (If the units have balconies, make sure it is very clear who is responsible for them - homeowner or HOA. It it's the HOA, look for them in the reserve study.)


From the rules and regulations:
-Are the rules things you want to live with?
-From what you can see, are other people following the rules?
-Do the rules seem to be clear and enforceable? If they aren't, there is a pretty good chance that the HOA will be full of arguing.

If you are planning to buy a condominium and rent it out, make sure the HOA allows that. Also, screen your applicants very carefully. You will end up dealing with any problems they cause.

Usually you get the HOA documents during escrow. At that point you've made your choice and just want things to work out. It's better to get them sooner.

One problem with HOAs is that many people like to complain, while few like to help. It is hard to get people to serve on the board. Directors are chosen not because they are qualified (although they might be), but because they are the only ones who can be persuaded to do the job. Sometimes directors have been chosen because they were outspoken about keeping dues down - but they really had no idea of the financial realities.

California has many laws about condominiums, and most directors are not aware of them. A good management company can help with this, but a good management company is very hard to find. A good source of information is Davis-Stirling.com, the #1 resource for California's condominium associations, stock cooperatives, gated communities and community associations..

Condominiums are a risky investment. You can have years of responsible boards, but those may be followed by one board that decides to use money to reduce the local pigeon population instead of funding the reserves, or one that believes that funding community social events is more important than fixing the stucco.
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Old 06-20-2010, 12:10 PM
 
7,541 posts, read 5,146,531 times
Reputation: 1831
Best advice: dont buy a condo/townhouse that is part of an HOA.

Learned too many from friends and family how much HOA's put too much restriction on you. Want to hang dry your laundry so you dont waste electricity with your dryer: oops.. no can do... Want to paint your house a different color so people can find you? oops no can do... want to save water by only watering your lawn 2 times a week... oops no can do . Want to grow a different type of grass for your lawn, beucase the type of grass they want you to have is actually wasteful in water; oops no can do.
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Old 06-20-2010, 04:11 PM
 
Location: Los Angeles, CA
787 posts, read 1,623,490 times
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Quote:
Originally Posted by Arus View Post
Best advice: dont buy a condo/townhouse that is part of an HOA.
That is really not possible....by definition a condominium is a common interest development and will have a HOA to manage the building's affairs.
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Old 06-20-2010, 05:14 PM
 
1,964 posts, read 4,429,284 times
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+1 on the reserve study. Soooo many associations (especially recent aptmnt conversions) are inadequately funded by their developers so they don't have extra cash to do normal maintenance like repiping, reroofs, concrete/asphalt repair and forget about earthquake damage! After the Northridge earthquake back in the mid-90's, lots of associations went underwater & units foreclosed because owners were hit with huge bills in the tens of thousands which may or may not have been covered by FEMA assistance.
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Old 06-20-2010, 06:47 PM
 
7,541 posts, read 5,146,531 times
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Quote:
Originally Posted by SoCal35 View Post
That is really not possible....by definition a condominium is a common interest development and will have a HOA to manage the building's affairs.
Not always. A condo can be apart of a building, but that building may not be under any HOA rule.

couple of condo's in my neighborhood that I was looking into were not apart of any HOA.

another one I was looking at, the "rules" were by the tenants, common sense rules like be sure to bring in your garbage can by 10pm on the day its collected (so it doesn't block a space on the street in front of the apartment building). No loud music or noice after 11 pm at night, etc. No dues were paid; if you wanted to be sure that the lawn in front of your condo was green, you paid for the maintenance out of your own pocket. Gas and electricity were all seperated to their respective units.
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Old 06-20-2010, 08:49 PM
 
3,777 posts, read 7,167,630 times
Reputation: 4134
Quote:
Originally Posted by Arus View Post
Not always. A condo can be apart of a building, but that building may not be under any HOA rule.

couple of condo's in my neighborhood that I was looking into were not apart of any HOA.

another one I was looking at, the "rules" were by the tenants, common sense rules like be sure to bring in your garbage can by 10pm on the day its collected (so it doesn't block a space on the street in front of the apartment building). No loud music or noice after 11 pm at night, etc. No dues were paid; if you wanted to be sure that the lawn in front of your condo was green, you paid for the maintenance out of your own pocket. Gas and electricity were all seperated to their respective units.
Whose responsibility was it to pay for roofs, common walls, and the outsides of the buildings (paint, stucco, whatever it was)? Was there any common drive or parking lot? How did they handle termites in common walls?

I realize you might not know these answers, since you didn't buy there, but I'm interested, if you do know.
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Old 06-20-2010, 09:28 PM
 
1,465 posts, read 4,413,770 times
Reputation: 849
Quote:
Originally Posted by Arus View Post
Best advice: dont buy a condo/townhouse that is part of an HOA.

Learned too many from friends and family how much HOA's put too much restriction on you. Want to hang dry your laundry so you dont waste electricity with your dryer: oops.. no can do... Want to paint your house a different color so people can find you? oops no can do... want to save water by only watering your lawn 2 times a week... oops no can do . Want to grow a different type of grass for your lawn, beucase the type of grass they want you to have is actually wasteful in water; oops no can do.
Many people don't like living next door to someone hanging their laundry in the front yard or painting their house pink. HOAs are becoming more and more popular for that reason.

Of course, as HOAs become more popular, the non HOA neighborhoods start attracting more people that want the freedom to do whatever they want. That causes the people that like to keep their yards and homes looking nice going to controlled (HOA) neighborhoods.
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Old 06-20-2010, 10:15 PM
 
7,541 posts, read 5,146,531 times
Reputation: 1831
Quote:
Originally Posted by DowntownVentura View Post
Many people don't like living next door to someone hanging their laundry in the front yard or painting their house pink. HOAs are becoming more and more popular for that reason.

Of course, as HOAs become more popular, the non HOA neighborhoods start attracting more people that want the freedom to do whatever they want. That causes the people that like to keep their yards and homes looking nice going to controlled (HOA) neighborhoods.

and that is what i find ludicrous. in this day where we are harping about saving electricity, its these HOA's that put up these ridiculous rules like hanging your laundry out to dry.

Is the HOA now going to pay for my now exorbitant electricity bill so that I can dry my stuff in a dryer?

Are they now going to pay me so that I can replace my underwear every 6 months instead of every year because heat from a dryer actually ruins the elastic bands in them?


Hey, if you liked to have every aspect of your life controlled; rules that say when you can or can't wash your car; how you can park your car in your driveway, or what grass and flowers you can gorw, even telling you what kind of curtains and the color they have to be, you can hang, then so be it.

I dont swing that way. The only thing I can see an HOA governing is when garbage pick-up is, and if there is a pool and/or weight room, that they keep that up with any fees I provide.

other than, stay out of my business as to how I want to keep my home.

If they are becoming popular, then so be it. I will never live in an HOA environment and thankfully, Im not in that situation. I know a waste of money when I see it, and when my rights are being trampled on.

they want conformity and blandness. that's their pleasure. I find it obnoxious.
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Old 06-21-2010, 10:29 AM
 
1 posts, read 2,021 times
Reputation: 10
What to ask a HOA before putting down an offer?

CAN WE CONDUCT AN AUDIT?


Too many shady HOAs out there...audit, audit, audit.
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Old 06-21-2010, 11:36 AM
 
Location: Los Angeles area
14,022 posts, read 16,947,806 times
Reputation: 32174
Lots of interesting stuff here. I have been a member of an HOA board for about 8 years now. Yes, read the rules before you even make a bid to be sure you can live with them. For those who want their house pink, etc., buying into an HOA would be a big mistake, but the rules are mostly designed to protect people's property values and to prevent the place from looking like a shantytown (which again goes back to property values). Yes, ask to see a financial statement. If there are almost no reserves (and $10,000 would be almost no reserves) don't buy there, unless you can easily afford surprise assessments. And yes, talk to people! Talk to more than the board president; talk to as many board memebers as you can, and talk to people who are not on the board. Things are fairly calm and fairly rational where I own and live; I have not experienced the horror stories which have been posted on this thread, but do your homework thoroughly so you do not either. Is the maintanence of common areas shabby? A red flag. Is the maintenance of owner-controlled areas shabby? Another red flag, as it means either inadequate rules or inadequate enforcement of the rules. Good luck.
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