Recently, in dealing with some first-time Boston condo homebuyers, we have addressed the question of what are HOA fees. This gives us a good chance to educate folks on what HOA fees and Special Assessments are as they relate to condos.
A more formal article has been put together that is called "What are Homeowners Association (HOA) Fees?". Essentially, it lays out the basics of what you can expect from HOA fees and Special Assessments.
Aside from educating yourself on what HOA fees are in general, a key takeaway from an article like this is that when buying a property that involves an HOA fee, you need to perform some extra due diligence around the health of the HOA reserve funds, and any Special Assessments that are looming - something that you might not remember to do if you have never purchased a property that has a Homeowners Association. Additionally, don't forget to factor monthly HOA fees into you overall monthly outlay for living expenses - a $400 HOA fee represents an additional 25% on a $1,600/month mortgage payment.
Russel Ray - San Diego State University, CA
After the October 2003 fires here, I did an inspection on a condo that had a wood shingle roof. I warned my Clients that many HOA's were passing special assessments to replace the wood with a more fire-resistant material. I did the inspection in early June 2004. They found out that there was a special $10,000 assessment on all owners of record on July 1, 2004. They were closing escrow on June 30, 2004. They cancelled escrow.
Nov 05, 2008 05:33 PM
Boston Condo Guy - Boston, MA
Hopefully they provided the Seller with an opportunity to rectify the situation - much like any items coming out of an inspection, the Buyer should at a minimum allow the Seller to respond to concerns raised. However, in this situation, it sounds as though you were the one that unearthed the preexisting information that a special assessment was on its way, something that obviously should have disclosed at the outset of the listing.
Nov 06, 2008 12:34 AM
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