Things to ask about HOA's and CCR's!!

Real Estate Agent with Century 21 Riverstone

What to ask your Recreational Investment Realtor

When thinking about investing in recreational real estate, especially in a mountain environment, there are issues that need to be carefully considered unlike buying a home that you will live in. I was thinking about this topic and came up with some key questions you should be asking your Recreational Investment Realtor, so that the purchasing of recreational property is successful.  I deal with Lake Pend Oreille waterfront and Schweitzer Ski Resort in Northern Idaho, but these tips can be used in different areas and developments.

CCR's and HOA's.

CCR's (Conditions, Covendents and Restrictions) and basically the do's and don'ts of a property. HOA (Home Owners Associations) police the CCR's.  So what are some things your realtor should be doing to make sure your purchase or investment turns out to be a good one?

  • Make sure you have all the CCR's and have someone read them carefully.  Most likely the condo is in a PUD (Planned Unit Development) and will have their own CCR's, but there most likely will be another set of CCR's for the PUD. 
  • Ask for the HOA meeting minutes.  Sometimes in the HOA meetings there are things brought up that have not yet been voted on that could affect the use or investment potential of your condo  Example:  You purchase the condo as an investment and would like to rent it short term, (cash flow) and the CCR's show that short term rentals are fine.  But..... In the minutes there was a request to review the rental policies and they would like to put it out to vote at the next annual meeting for a change of the CCR's to no longer allow short-term rentals.  If that passes, then so much for the short-term rental investment.
  • Upcoming assessment.  In the meeting minutes there could be an upcoming assessment.  Example: paving of the driveway, new roof, replacement of a retaining wall, etc.  This could cause an increase in your HOA dues, again affecting your investment or expense.
  • Ask for copies of the HOA budget and see what your dues are truly being spent on and what kind of reserve is in the bank.  No reserve= not a lot of security and could mean higher dues down the road.
  • Ask if there is an LID (Local Improvement District) these could be for the condo or the PUD.  Example: the condo development has a private road that is privately maintained and is used by; let's say 3 different condo developments with different HOA's.  They request an LID that would pay for the paving and each homeowner would be responsible to pay back their portion of the LID for a set period of time.  Wouldn't you like to know about that expense before you close on your investment?
  • What do your HOA dues cover?  Each HOA is different and your HOA bill can pay for different things, example: water, sewer, maintenance, snow removal, etc.

There is good and bad HOA and CCR's. In general they are there to help protect your property value, condition and to give you peace of mind.  Just make sure you know how they work and the effect they could have on your purchase or use.

Best regards,

Patrick Werry

Realtor, Sales Associate

Century 21 Riverstone

Sandpoint/Schweitzer,Sandpoint Idaho

c.208.290.2016 o.208.255.2244



Comments (1)

Lexi & Jordan Ostlund
RE/MAX Professionals - Gillette, WY

Great information.  Thanks for sharing!

Aug 12, 2010 12:00 PM