HOA contracts - what to do with them when buying

[tetra316 0]

This townhouse/condo I'm thinking of buying has a HOA. I got the documents and bylaws and such and read through them. Seems reasonable but how do I know for sure. What do you do when you buy in an HOA area? Have someone review the docs? Or don't bother with them?

[Conundrum 1]

I wouldn't buy a house that had a HOA.

[tetra316 0]

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I wouldn't buy a house that had a HOA.

It's not for everybody.

[Thanatos340 1]

When I was in the Market for a Home, My biggest rule was ABSOLUTLEY no HOA. I am Not a fan of Lawn Nazi`s and value my privacy. Last thing I want is a busybody committee of bored housewives telling me what I can and cannot do with MY property.

I know HOA`s a big plus for some people and I could understand why some would want them but I personally cant stand them.

[Jewels 0]

I do real estate work in Colorado, and while sometimes people will ask their attorneys to review the title documents (including HOA docs), it's usually in the context of custom home building and it's probably not an expense that most people would want to incur unless there's something particularly unique about the transaction or there is a lot of money involved. (NOT saying your transaction may not qualify, but you know what I mean.)

I'd suggest reading through the documents yourself and seeing whether any red flags crop up. HOA docs usually aren't written in Greek or legalese, even though they may have legal import. If there's anything that gives you pause, talk to other homeowners in the area, people who serve on the HOA board, or, decide if it's worth it to contact an attorney. You might also discuss it with your broker if you have one. It's no guarantee that you won't have any surprises later, but it's a cost/benefit ratio for you to consider before you think about having a lawyer review those documents for you. Besides--a lot of the things that you might be most interested in may appear in the rules and regulations, and you're probably better positioned than an attorney to know which of those rules may be a real problem for you.

TPM Sister #102

[LisaM 0]

If it's a nice enough area and the houses aren't empty, why not? We did not have our old one reviewed at all by anyone other than ourselves.

And I admit, I did not know that we were only allowed 2 cars until after we moved in. But they eventually found out we had 3 and it did not bug them. But if we brought in our unsightly non-running 57 Chevy and parked it there, they would have issue with that.

It helped keep the neighborhood nice in what turns out to be largely rentals.

~ Lisa
~ Do you Rigminder?

[NWFlyer 2]

I think you'll probably learn more by talking to residents and finding out about the association itself. We have to have an HOA because it's four townhouses but the way it's laid out we have some common property that makes it technically condo. Three of the four units have the original owners, the fourth has changed hands just once in the 6 1/2 years since the units were built. We meet maybe once a year (formally), we all get along fabulously well and hang out socially, and for us, the HOA stuff is a formality we have to deal with because the bylaws say so. Example: bylaws say no more than two pets per unit unless you get approval of the association. My neighbors had three cats for a short period of time. They sent out an email saying "hey, the HOA bylaws say we have to get approval, everyone cool with it?" and we all agreed it was fine. But I'm sure other HOAs would be much more anal retentive, so just reading the bylaws probably isn't going to tell you what it'll really be like to live with an agreement.

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." -P.J. O'Rourke

[tetra316 0]

Thanks for input so far. I quickly read the documents and the only thing I don't like is they say they can go into your house in an emergency anytime w/o notice. But I suppose that's reasonable. It does say though any other time they must give you notice and only enter when it's okay with you.

They prohibit dogs running free but it doesn't mention cats so I'm good there (I have an outdoor/indoor kitty)

And of course you have to get approval for outside changes but it also mentions inside changes need approval as well over a certain dollar amount.

I think I'll go up there this weekend and knock on some doors I guess.

[Jewels 0]

The entry in event of emergency thing is very standard and I think for almost any townhome/condo scenario like the one you're describing, you're likely to see similar language in the HOA docs. I can appreciate why you might not love it, but as you said, it makes sense. When you share walls, etc., with other spaces, things that happen in your unit can quickly affect others, and vice versa. I can think of one specific instance where flooding in an upstairs condo did some massive damage to the unit below. The owners of the upstairs condo were out of town, so they had to go in anyway to cut off the water. In fact, there are probably many emergency situations in which you'd WANT someone to go in.

Good luck!

TPM Sister #102

[TheBachelor 5]

I live in an area with a HOA. I really like it because they make sure everyone keeps their property looking good. If you've read the CC&R's, and nothing jumps out at you, I'd call it good.

The only other thing you may want to inquire about is how much the fees have increased in the last few years. That may tell you what to expect in future increases.

Wait, I forgot another... Here in California, they are required to do an annual reserve study. That's basically a list of "common" items (like a community pool, clubhouse, etc.). Along with each item, its useable life and replacement cost are listed. It basically amortizes all of that stuff out, and compares to how much money is in the reserve account. That way you don't move in, and in the first year have them come and say that they need to replace all of the roofs, and you'll need to pay a couple grand in a special assessment.

There are battered women? I've been eating 'em plain all of these years...

[tetra316 0]

They just had a fee decrease of $50 to $100. I also got the reserve study too, and they're required to have an independent review if they spend more than $75K in a year. It seems pretty well run.

[ChristopherZ 0]

You're doing a good thing by looking through the documents. Bonus points for reading the reserve study I wish everyone in my community would do that.

One thing I would caution you about is that a decrease in dues is not always a good thing. If you're still meeting projected expenses after the decrease that might be fine. You may want to ask about what went into that decision.

[lawrocket 3]

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This townhouse/condo I'm thinking of buying has a HOA

Important distinction with condos, etc., and houses with HOA.

HOA's serve a pretty useful purpose with common areas.

As far as what is reasonable, well, "reasonable" to you may not be reasonable to others.

Drop a hundred bucks and have an attorney review it and explain to to you.

My wife is hotter than your wife.

[skiskyrock 0]

There are two types of HOA. Those that are written to be a PITA from the start, and those that become a PITA when interpreted by a fellow homeowner. It's not so much that I care that I used to have a contract that specified how far my wood pile had be from the building, but that I had a neighbor that actually took the time to measure.

With NWFlyer as an exception, I don't think that the type of people who skydive are necessarily a good fit with an HOA.

[sartre 0]

The thing I found to be the most helpful was reading the minutes from the HOA meetings. You will learn what issues have arisen: for example, I know that one owner has a big problem with the fact that we are only allowed 3 flowerpots on our front porches. (Which I agree is kind of random; my solution would be to get three huge ass flower pots ). More importantly, I was able to see what issues had arisen regarding things such as pool security, parking issues, etc. and how they were dealt with.

[Jewels 0]

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Drop a hundred bucks and have an attorney review it and explain to to you.

If you decide to have an attorney do your review, find a firm that does a lot of HOA work so that you know their time will be efficiently spent and discuss the price up front. It's not uncommon to find counsel that charges $200+ per hour. You've seen how large the documents are. Just reading them closely can be fairly time-consuming. I would suggest that you request a review at a pre-determined flat rate or that you get an estimate that you can live with up front. People tend to appreciate their counsel much more when they do not have sticker shock upon receipt of the invoice.

TPM Sister #102

[NWFlyer 2]

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With NWFlyer as an exception, I don't think that the type of people who skydive are necessarily a good fit with an HOA.

I'm not exactly sure how to take that, Matt.

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." -P.J. O'Rourke

[Shotgun 1]

I used to own a condo with an HOA. I just read through the documents myself. They weren't too hard to understand, and I never had a problem with them. If you have any questions, I'm sure the HOA could answer them for you. I don't see any need to hire a lawyer. It's not like the HOA is trying to trick you into anything; it's to their advantage that you understand and agree to the bylaws before joining them.

[superwoman8433 0]

You are going to be hard pressed to find a condo/townhome that doesn't have HOA. The HOA should be used for all the common area, maintence on property, etc. One question you should ask is who runs the HOA? Is it the owners themselves or is it the developer?

I work for a developer and one thing you have to be careful with is that a lot of the time if the developer is still involved in the community, the fees will be lower because they contribute to the fund. When they leave it is all turned over and often you see the fees go up. Ask if there is a cap on how much the fees can go up? If there isn't, that should be a red flag. All the communities I have sold and bought in have had a cap on the amount in which the HOA can go up.

Other than that, IMO HOAs can be great because its shit you don't have to maintain. Its done for you.

[lawrocket 3]

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Drop a hundred bucks and have an attorney review it and explain to to you.

If you decide to have an attorney do your review, find a firm that does a lot of HOA work so that you know their time will be efficiently spent and discuss the price up front. It's not uncommon to find counsel that charges $200+ per hour. You've seen how large the documents are. Just reading them closely can be fairly time-consuming. I would suggest that you request a review at a pre-determined flat rate or that you get an estimate that you can live with up front. People tend to appreciate their counsel much more when they do not have sticker shock upon receipt of the invoice.

And Jewels looked upon the writings of lawrocket and went in depth. And lawrocket saw that it was good, and sage, and completely correct.

And then lawrocket wrote, "Tell all of your kine to read what Jewels hath written, because kine may be forclosed and evicted, and kine are very hard to come by." And lawrocket incorporated by reference Jewels' statement and wrote to thee, "Jewels speaketh the truth. And thou shalt looketh upon the words, and smite all those who oppose."

My wife is hotter than your wife.

[squirrel 0]

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Other than that, IMO HOAs can be great because its shit you don't have to maintain. Its done for you.

oh yeah, right. i love it when some group of un-employed nit-pickers get to tell me what i can and cant do with MY property. i own five houses, and will never, ever, own an HOA property. when given even the smallest amount of authority, these groups go ape-shi* on you. just my 2 cents.

many of my clients own HOA's, and they hate it. cant park here, cant have this sticker on there car, gotta rake the leaves..., not for me.

________________________________
Where is Darwin when you need him?

[MikeMcLean 0]

If it is a deed-restricted community, where the deed to the house grants the HOA its powers, your choices are sign it or not purchase that house.

It wouldn't hurt you to think like a fucking serial killer every once in a while - just for the sake of prevention

[MikeMcLean 0]

Another option (one that I am in the process of doing) is to purchase with the HOA and than become a member or president of the HOA!

It wouldn't hurt you to think like a fucking serial killer every once in a while - just for the sake of prevention