Article Courtesy of FOX NEWS
By Robert Massi
Published June 19, 2017
Each year, millions of people move into communities governed
by Homeowner’s Associations (HOAs), and every day, I hear from folks who love
them. I also hear from many others who find themselves trapped in nightmarish
battles with their HOA management.
There is no place for
apathy in regards to your HOA. Many homeowners just assume
things are being run well. Sadly, sometimes that is not the
case. Homeowners need to take care, and pay attention.
For help with this topic, we turned to HOA expert Jill
Schweitzer, a realtor who for years had been helping people
navigate the often tricky and frustrating world of HOAs.
Tragically, not long after I spoke with Jill, she suffered a
medical emergency and passed away. But before she died, Jill
created “HOA Savers”, a program to help homeowners navigate the
often tricky world of HOAs. I know that her extremely helpful
advice about HOAs will continue to help many more people, long
after her untimely death.
Joining an HOA? Be sure to ask the right questions.
Jill’s biggest point of advice: Check the rules before it’s
too late, because you must live by their rules!
Look carefully at the Covenants, Conditions, and Restrictions (CC&Rs). Those are
the rules that you will be required to live by — often with little recourse.
Are pets allowed? Can you park a car outside? Can you park in the street? What
are the landscaping rules? What are the rules for garbage cans? Are there rental
restrictions? These are all things that will basically dictate the way you live.
One of the things that I hear complaints from homeowners about all the time is
the “architectural committee." These are the folks that will be deciding whether
you can paint a certain color, add an addition — even what you can have out on
your porch or front lawn.
If you break those rules, you commit violations. You could be fined, and believe
it or not, the HOA has the right to put a lien on your property, and foreclose
if you don’t pay the lien.
As Jill said, ignore these penalties and you could suddenly have a $600 bill
turn into $3,000 — with penalties and attorney fees tacked on.
Some important tips:
#1. Look carefully at the collection and violation policies. You need to know
how you will be treated if you are late on dues or break a rule. When you sign
on with an HOA, in many cases you are literally signing away many of your
#2. Ask for a copy of the insurance declaration page. Look at what the HOA is
paying for. Ask your own insurance agent for their opinion on what the HOA is
responsible for and what you are responsible for.
#3. If possible add into your purchase offer that the owner warrants that the
property does not have any HOA violations and that this condition survives
closing. This is not an easy thing to negotiate by the way, but it will protect
you from paying for someone else’s mistakes.
The condition of the community is your first sign of potential issues with
mismanagement, and the possibility of a future costs, so look closely at the
condition of the community before you purchase. Have they been skimping on
maintenance and not making capital improvements? Those things are not likely to
suddenly get better. Really examine how the community looks and feels by
visiting at different times of the day, and talking to the neighbors.
When you make your maintenance payments, you might assume that they are saving
enough to handle repairs and improvements. Check into that … before it’s too
late. Be sure to look for a “reserve study." That should show how much money is
being held for future problems that may pop up within community. Does the HOA
have a big enough reserve set aside for big expenses? (If not, guess who will be
paying for them.) What percent of the reserve fund is actually funded? (100
percent is ideal, 30-70 percent brings a medium risk of a special assessment,
and 0-30 percent means you are at high risk).
Rebecca Grossman of the Scottsdale Area Association of Realtors says “you want
to make sure that you read all of those documents very carefully, and understand
those assessments. Make sure that there is not something down the road that is a
problem in that owners’ association that’s going to have to be remedied by a
Ask the HOA if they are responsible for the roofs and exterior of the buildings
— or if that falls to the homeowner. While you’re at it, ask how old the roofs
are, if they had excessive water leaks or if there have been issues with any
flooding of any units.
Have they had any insurance claims or personal injury claims? Don't wait until
your dues are continually raised, or until you are hit with a special
assessment. Look at the records. Ask the questions early.
Find out what the expenditures have been in the last couple years for common
areas — landscaping costs, exterior painting costs, and repairs. It’s possible
that they won’t tell you, but you need to ask.
Ask for copy of the violation policy and the collection policy and the last 6 or
even 12 months of meeting minutes.
If at all possible try to attend an HOA meeting before your purchase, and talk
to some of the neighbors.
Don’t just look at the maintenance fees or monthly dues before deciding to sign
on; look to see if they've been skimping on maintenance, or not making capital
improvements. Those things are not likely to suddenly get better.
Look to see if there’s been any problems or any lawsuits filed and see if there
is any history of complaints or problems on the county’s website.
Get an idea of how is the board is perceived by those who live there. Are they
cooperative? Do they actively try to help the homeowners, or are there a lot of
politics involved? We all know that can happen.
Don’t only look at the maintenance fees or the monthly dues before deciding to
Go ahead and ask for a copy of the insurance declaration page. This might drive
them crazy, but you want to see what the HOA is paying for.
There are many very good HOA boards — men and women that work very hard and act
in the best interest for the members of the community — but buyers need to do
their homework before signing on the dotted line.
As always, it all comes down to my most-repeated piece of advice: Do your
homework. Analyze the reserve study and financials and —I’ll say it again — read
ALL of the HOA documents and rules.
This is a place where you will most likely live for years. Some due diligence up
front will pay off in the end, I promise you.
I have a very simple solution for this problem. Wanna know what to do
before joining a homeowner's association? How about this: DON'T!!!! That's
right, DON'T! Do not join a homeowner's association. At all. Period. No
exceptions. In fact, I will even go so far as to say RUN THE OTHER WAY AS
FAST AS YOU CAN from homoewner's associations!!!! There are tons and tons of
great houses to buy all over this country that have no homeowner's association
tied up with them.
Me personally, if I was trying to buy a house, I would tell
the realtor in no uncertain terms, "Don't even bother showing me a house or even
a listing for a house if it has a homeowner's association hooked up to it,
because you'll be wasting both your time and mine, because I'm already going to
tell you right now, flat out, the answer will ALWAYS be NO!!!"