I conducted an inspection this weekend on a condo unit. As I approached, the first thing I noticed were the construction trailers around this particular building. The second thing I noticed was the scaffolding erected at the rear of the building.
Mind you, a condo inspection only includes what is on the inside of the unit ( paint to paint) however, as an informational aside, I tell my client about anything that I find in the common areas that might impact his ownership such as broken sidewalks, problems with stairways, mold in the hallways... etc.
As I walked around the building, a gentleman wearing a tie came up to me and asked me what I was doing taking pictures of the building. I explained what I was contracted to do and he then introduced himself as an attorney involved in a lawsuit with the HOA. RED FLAG.... "Danger, Will Robinson, Danger, Danger...."
As I proceeded onto the stairway, there was a notice stapled to a post informing the building residents about a meeting in a court house to inform everyone about the progression of the lawsuit.
I then overheard two gentlemen discussing some of the work going on. They appeared to be residents, so, I approached them told them what I was doing there,and asked if they'd be willing to tell me what was going on.
The two gentlemen were more than happy to vent. Apparently, to make a long story short, The buildings had been erected with sub-standard materials, Rot had appeared on the supports for walkways, and moisture had infiltrated some units causing mold and mildew conditions.
I asked if the HOA had issued a "special assessment" for repairs, and was told in 6 years there were 2 "special Assessments" to the owners, one being used to cover higher insurance rates. But, they wouldn't discuss the second assessment. RED FLAG.
When My client ( Young man, first property) showed up, I told him about what I had found out. He was aware of some of the situation, but, had been assured by the seller that the lawsuit was over and done with.
Having informed him, I felt that my responsibility had been discharged. He still wanted the inspection, which I concluded, and he stated, after I pointed out the stapled notice, that he didn't know about the meeting, but was now planning on attending.
The moral of the story:
If you are buying a property that involves a HOA, there are some points to consider. ie:
How much are the HOA fees and when are payments due?
What do the HOA fees cover?
What don't he HOA fees cover?
What procedures are in place to collect delinquent HOA fees?
How often can the HOA fees increase and by how much?
How does the HOA's annual budget compare to similar communities?
Does the communities HOA have a viable reserve fund?
Have special assessments been levied?
Are there restrictions on renting property?
Do the architectural guidelines suit your preferences? (can you paint your unit yellow?)
Is the community age-restricted?
Are there simmering issues between homeowners and the HOA board?
What are the rules with respect to pets, flags, outside antennas, satellite dishes, clotheslines, fences, patios, parking and home businesses?
Are HOA board meetings open to all residents?
Be informed, be prepared.............