HOA Due Diligence

C

CalGal_IHB

New member
<p>When purchasing a house with an HOA, what should a responsible buyer do to check out the HOA? </p>



How much should be in the reserve account?

Would a potential buyer have access to past Board Minutes?

Should the Buyer have a lawyer or accountant review the HOA books?

Are there any good websites regarding this?

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<p>Any suggestions would be appreciated.</p>

<p>NIR, what do you recommend your buyers do to check out the HOA?</p>
 
<p>CalGal,</p>

<p>When you enter a contract to purchase, you will be given HOA's CC&R and Rules and Regulations plus HOA's financial statements (showing reserve, income, and expenses).</p>

<p>If you purchase a condo, then there are usually 2 sets to review (master's and subdivision's). </p>

<p>You should scan through every single page because the material can stack up to 8" of reading materials.</p>

<p>You should carefully understand items that most important to you. Example:</p>

<p>1. Parking rules (can you park on the street). Do your guest need parking permits....Can you park your RV?</p>

<p>2. Pets - how many are you allow to have. Maximum pet size. Type of pets you are not allowed to keep.</p>

<p>3. Landscape design: Can you just do what you want?</p>

<p>4. Running powered tools - Curfew?</p>

<p>5. Security patroling.</p>

<p>HOA's Strength - how big? How strong? You can tell if the HOA team contract get renew year-after-year, an indication of good business management. You should read the financial statement to see if money is spent wisely. Good reserve is a good plus. $1M+ is good IMO. </p>

<p>You definitely want to know past and pending lawsuits to the HOA. This could effect your future assessments.</p>

<p>Seller has obligation to disclose to you any nuisance in the neighborhood as well, and a bad HOA is considered one.</p>

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<p>oc_fliptrack,</p>

<p>I suppose the listing agent can arrange it. Most of these documents are available on-line, obtainable through HOA membership on-line account.</p>
 
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