You’ve probably heard plenty of HOA horror stories — people hurt by the group who’s supposed to be watching out for their interests. Whether you already own a home or condo with an HOA or want to buy, a little research can save you a headache down the road.
Surprisingly, there’s a lot you can find out with a bit of digging if you’re willing to put in the work. Follow this checklist to tell if your HOA is in a healthy place.
1. Have a Look Around
The simplest way to tell if an HOA cares for homeowners’ needs is to take a walk or drive around the neighborhood or building. Assess the amount and type of public spaces available. Even more importantly, how are those areas maintained? As you look around, take note of the state of cleanliness and spots in need of repair.
Aside from taking care of the public amenities and grounds, part of the HOA’s job is to uphold the rules and regulations for homeowners. A tour of the development or building should be pleasing to the eye, with manicured lawns and well-maintained entries. Strong odors and trash strewn about aren’t a great sign.
2. Talk to Other Homeowners
While you’re on your tour, talk to homeowners you come across. They likely won’t have any difficulty expressing their opinion. One guarantee with an HOA — people love to talk about them. Listen to what they say and see if any criticisms they have are legitimate.
You should always take strangers’ accounts with a grain of salt, but be wary of any comments about undue rule enforcement or petty local politics. These can be signs that an HOA is not operating in a healthy place.
Engage anyone you come across in conversation. Be an active listener and you’ll be surprised at the information you gather.
3. Review the Rules and Restrictions
Covenants, conditions and restrictions (CC&Rs) can drastically differ between HOAs. You should always be aware of the most current version for your building or development. A healthy and thriving association will have codes balancing the need for uniformity against extreme strictures.
Most importantly, you’ll want to see the HOA’s ability to adapt and change with its residents' needs. How often have CC&Rs been overturned, changed or added? Also, how do they handle votes on these issues?
Some HOAs require 75% of the vote to amend the rules. In most cases, that high of a vote is near impossible since many people choose not to vote or get involved at all. Reducing the number to a simple majority leads to a more adaptable HOA.
4. Ask to Attend a Meeting
Before buying a home or condo with an HOA, ask for special permission to attend a meeting or read their minutes. If they have a lot of dirty laundry, you’ll likely uncover it here. They’ll need to report on any open lawsuits, what renovations are underway, rules or conditions coming to a vote and many other things.
You’ll also get to see how many residents attend and how they’re treated when they do show up. Does the board ask for questions and take time to give reasonable answers? The last thing you want is a group of officers who act like they have something to hide.
5. Study the Financial Documents
You should ask for access to the HOA’s financial reports — specifically the amount of their reserve fund. These emergency savings will pay for events like unforeseen repairs. Without a healthy fund, they will add any extra costs to your monthly dues as a special assessment, where payment is non-negotiable.
Another good thing to check out is the cost of dues and how those have changed over the last few years. You may gather some of this information from your conversations with other homeowners. If not, you can ask the board of officers. You’ll get an idea of how much money they’re bringing in between special assessments and monthly fees. With that in mind, take a look at the budget plus your observations of the grounds to see how the HOA is handling its money.
Use Your Knowledge and Take Action
Is the HOA you’re in or are considering not quite up to snuff? At this point, you’re in a unique position of knowing more than most in the development or building. Instead of giving up, get going. Consider running for HOA representative or at least become an active attendee of all meetings. After all, an HOA can only be as good as the people running it.
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