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I prefer the reserve study, and want to know that it's within the last 3 years, then check the financials against that.
You'd be surprised at how many folks don't even bother looking.
The financials and the Reserve Study are helpful, but that can change in a hurry.
Our HOA was on solid financial ground four years ago. Then a group got a bunch of proxies and voted themselves on the Board, started holding secret meetings, closed the Board meetings, overpaid for poor quality work, wasted a bunch of money on property managers and lawyers, and so forth.
Homeowners were objecting to it, but it kept right on.
Now nothing is getting fixed because we ran out of money.
The one rule that I'm interested in the one that dictates how the rules can be changed.
My present HOA requires a majority vote of all of the homeowners to change or add a rule.
Not a majority of meeting attendees, but a majority of all the homeowners.
My previous home was in a HOA community that required a 2/3 vote of the HOA meeting attendees. Quorum was 5.
So some people got themselves elected, changed the rules in a poorly advertised meeting to solidify their position.
Then they added new rules like "HOA board members can enter any home at any time during daylight hours with the aid of a locksmith and a sheriff's deputy to inspect for HOA rule violations, regardless of whether the homeowner is present or not".
Also among the new rules were:
No repairing your automobile even with the garage doors closed,
No working a business from home.
I later found out that it was about a person who taught piano lessons from her home for two students.
The neighbor didn't like that so he organized the takeover and new rules.
This was a golf club community of 3,000 sq ft houses and 1/2 acre+ lots, so it wasn't like the piano noise was a problem.
The one rule that I'm interested in the one that dictates how the rules can be changed.
Our condo complex has the same rule. It is written into the by-laws.
Each owner should have the meeting minutes and financials made available to them.
I was given all that info before I closed..the last 3 board meetings and the financials.
The condo website also has an archive of all past meetings and financial reports.
If you are not reading them then shame on you.
If they are not available to you then consider selling.
I was one of those people. I had no idea such things even existed when I bought my condo. I avoided another complex because two different people (a mortgage person and a resident) told me their complex was in financial trouble. I just got lucky that I bought into one that was managed properly.
Now, after being a board member, I know a lot more, but I had no idea that I should be checking financials or that I should ask for the book of by-laws and condo rules. When I called the property manager to ask about something, that's when I found out I was supposed to have gotten the by-laws from the previous owners. She informed me that they could print me a copy but it would cost $80.
I was a little annoyed that my RE agent didn't tell me to ask about those things. I was 52 and had never owned any real estate before and was just winging it.
I was one of those people. I had no idea such things even existed when I bought my condo. I avoided another complex because two different people (a mortgage person and a resident) told me their complex was in financial trouble. I just got lucky that I bought into one that was managed properly.
Now, after being a board member, I know a lot more, but I had no idea that I should be checking financials or that I should ask for the book of by-laws and condo rules. When I called the property manager to ask about something, that's when I found out I was supposed to have gotten the by-laws from the previous owners. She informed me that they could print me a copy but it would cost $80.
I was a little annoyed that my RE agent didn't tell me to ask about those things. I was 52 and had never owned any real estate before and was just winging it.
I had to sign papers at closing that those documents were made available to me prior to close and that I had read them over and agreed to them.
The more responsibility an HOA has, the more closely you need to look at the financial side.
A low responsibility HOA, say they really do not do much, no amenties, etc, probably not much is going to be going on financially. An HOA with a pool, club house, pays for lawn care, security guards, roads, etc, yea, that is a lot of money and a lot of responsibilities.
Condos, of course, as the entire building and grounds is the condo association's responsibility. I know someone who bought a condo, and within the next three years, had thousands and thousands of dollars in special assessments on top of the monthly condo fee, financials were a mess.
The more responsibility an HOA has, the more closely you need to look at the financial side.
A low responsibility HOA, say they really do not do much, no amenties, etc, probably not much is going to be going on financially. An HOA with a pool, club house, pays for lawn care, security guards, roads, etc, yea, that is a lot of money and a lot of responsibilities.
Condos, of course, as the entire building and grounds is the condo association's responsibility. I know someone who bought a condo, and within the next three years, had thousands and thousands of dollars in special assessments on top of the monthly condo fee, financials were a mess.
That's what happened to the one I didn't buy into because I was warned. Apparently there were drainage problems that got worse over time, the builder was long gone, and the residents were stuck with figuring out a way to deal with it. They had to do major work around the property to keep water from pooling in the common areas and from entering the buildings, and the homeowners were paying hundreds in special assessments for a long period of time to pay for it.
I had to sign papers at closing that those documents were made available to me prior to close and that I had read them over and agreed to them.
In at least some states such a thing is state law. Another law is that the association president signs something to say that the current owner is up to date on any assessments/special assessments so that the buyer is not suddenly saddled with someone else's payments.
Also someone mentioned this to me but I'm not sure if it's an actual law or hoa rule or what. That the place being purchased be checked and signed off on as acceptable to the hoa, no unapproved additions or anything else unapproved so that the new owner is not stuck with fixing something.
In at least some states such a thing is state law. Another law is that the association president signs something to say that the current owner is up to date on any assessments/special assessments so that the buyer is not suddenly saddled with someone else's payments.
Also someone mentioned this to me but I'm not sure if it's an actual law or hoa rule or what. That the place being purchased be checked and signed off on as acceptable to the hoa, no unapproved additions or anything else unapproved so that the new owner is not stuck with fixing something.
A friend of mine bought a house in an HOA, received a letter form them stating the property is in compliance, and within four weeks of closing, received a letter of violation for three violations, items that were already present before he even bought the place. Minor things, but still...
In at least some states such a thing is state law. Another law is that the association president signs something to say that the current owner is up to date on any assessments/special assessments so that the buyer is not suddenly saddled with someone else's payments.
Also someone mentioned this to me but I'm not sure if it's an actual law or hoa rule or what. That the place being purchased be checked and signed off on as acceptable to the hoa, no unapproved additions or anything else unapproved so that the new owner is not stuck with fixing something.
yes, I got one of those as well that the current owner is up to date and there are no special assessments on the table for the future.
I guess I'd say I'm in a rather large complex.
We have 26 communities and each have their board
Each community also has their property mgmt company.
And there is yet another mgmt company that rules over the entire complex.
Everything goes through the property mgmt company and they funnel it to the board if applicable.
Some items are handled by the property mgmt company, others have to be approved by the board.
The board does not have free reign which keeps it in check from becoming a mini dictatorship.
Now at one point in the past I belonged to a rather small HOA group where the board did it all.
We were 12 homes and the HOA was rural based...how many cows per acres, etc.
Well some new owner wanted to turn our rural HOA into an "estate" type of HOA with no livestock, no field fence and mowed acreage and suburban type fencing. Fortunately they didn't read the rules. Our rural set of rules ran with the land for 99 years before they could be changed.
It worked well for us because it prevented junk yards, overgrazed pastures, etc and allowed those of us that wanted to raise a few animals to do so with some protection.
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Our condo complex has the same rule. It is written into the by-laws.
Minor things, but still...
