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Buying a Condo? What You Need to Know About Homeowners’ Associations

In this tight economy, many would-be home buyers find that a condominium is more affordable than a single-family house; offering amenities, such as a swimming pool or fitness room, which they could not afford on their own.

Condo owners may also enjoy professionally landscaped grounds, onsite maintenance staff, and sometimes the security of a gated entrance and nearby neighbors. Along with the perks, however, there are some potential drawbacks which you should be aware of before considering a condo purchase.

When you purchase a condo, you become a member of a homeowners’ association (HOA).

The Good News

The HOA serves to maintain peace, cleanliness and efficiency throughout the condo complex. The board of directors is responsible for maintenance, such as lawn-mowing, trash pick-up, pool cleaning and elevator repair; as well as the enforcement of rules and regulations.

Each condo owner pays a monthly HOA fee to cover these services.

The monthly fee, which may be as little as $70 or as much as $500, is not a part of the mortgage payment, but is paid directly to the homeowners’ association.

The Bad News

Overdue fees may incur fines, or even a lien against your property. The HOA may also increase fees according to their bylaws.

After the homeowners’ association has paid monthly maintenance bills any remaining funds are held in a reserve account; to be used for occasional expenses, such as new roofing or exterior painting. If reserve funds are insufficient when a major problem, such as burst pipe, occurs, the HOA may require each resident in the complex to pay a special assessment.

Homeowner associations often have rules designed to protect the value of the property. These regulations, spelled out in the association’s Covenants, Conditions and Restrictions (CC&Rs), may restrict the use of outside antennas, what can be stored on your patio, pets, parking spaces and even the color of window blinds visible from the outside. Before making changes to your condo, such as painting, you may be required to submit a request for approval. CC&Rs are legally binding. Homeowners’ associations can sue the condo owner, or take possession of the property for serious violations.

What to Look For

If you’re considering the purchase of a condo, ask for a copy of the HOA’s financial statements, CC&Rs, by-laws and regulations as well as the minutes from the previous year’s monthly HOA board meetings. Speak to nearby condo residents and the HOA board of directors. These steps will help you analyze both the future and the atmosphere of the condo. Consider these points:

  1. Are there multiple HOAs for this condo? (Large developments sometimes have more than one HOA.)
  2. What is the turnover rate in the condo complex? (If residents don’t stay long there may be a problem with the HOA.)
  3. What percentage of the complex is occupied by renters rather than owners? (More owner-occupied units typically mean a higher resale value.)
  4. How often have the HOA fees increased in recent years?
  5. What resident complaints are noted in the HOA meeting minutes?

If you have concerns, ask a real estate lawyer to review the HOA documents. A lawyer can also check the history of any lawsuits filed against the HOA.

Published or updated on June 28, 2010

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About Sarah Davis

Sarah Davis is a real estate broker in San Diego, Calif. She enjoys helping both buyers and sellers and was voted one of the top 10 best real estate agents in San Diego in 2013 by Union Tribune readers. In her spare time she talks about real estate on a local radio show and manages her website RealtorSD.com.


We invite readers to respond with questions or comments. Comments may be held for moderation and will be published according to our comment policy. Comments are the opinions of their authors; they do not represent the views or opinions of Money Under 30.

  1. Sarah Davis says:

    What a pain Haley, I’m so sorry you had to go through that. I can understand why some people like condos but I can absolutely understand the avoidance of them as well!

  2. Haley says:

    I will say that you may want to meet the board members who are making the decisions. I have been very frustrated with the way the board makes decisions such as which proposed projects to spend reserve fund money on and which landscaping bid to accept. Recently, at a board meeting I attended, they decided to keep our current landscaper because he negotiated not mowing for three weeks and saving us $1500 BUT our bush is dead, there are huge weeds growing, our grass is dead, and our bush (before it died) was not trimmed all summer–it was so bad I couldn’t open my car door. After making this decision to stick with him (and deciding not to go with a different landscaper that would be $5000 less per year), they discussed spending money on putting in speed bumps! Speed bumps, on our street that is not even a quarter mile long! Speed bumps that will damage my car. So, be wary! Also, one of the board members went on a campaign to have me and my fiance evicted because they thought we were renters! (Renting is not allowed in our neighborhood). All of this was based solely on the assumption of one particular board member who assumed that because of our young age we must be renters. I know not all HOAs are like this, but I am so fed up, when we move, we will NOT be living in a neighborhood with an HOA.

  3. Matthew says:

    Great information to learn. I have recently been searching for a condo around the Bay Area in California. The home owner fees are so high but worth it. Just like anything else you get what you pay for in my opinion.

  4. Sarah Davis says:

    Thanks for your input! I appreciate the nice comments. I’ve never owned a condo, only singe family homes, yet I see some of the struggles in many of my clients. I’m working a lot of short sales on condo owners right now and it’s so frustrating for them. I’ve seen a special assessment as much as $10,000 per owner for road outside of the condos (that being rare though). Yet then again, many people have wonderful experiences and long term use from condos.

  5. Andrea says:

    a good article for anyone considering a condo

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