What to Know About HOA's

Florida is a haven for communities that have HOA’s or Home Owners Associations and many who purchase in communities that have HOA’s have no idea what they are, what they cover, and that there are actually expenses associated with HOA’s like dues that can be monthly or quarterly and assessments. Because of this, it is important to examine all HOA documents and rules and regulations of the community in which you are looking to buy so that you know what you are getting into. The last thing any buyer wants to do is to purchase in a community which is not financially sound or does not have the means to make improvements or cover the cost of the master insurance policy. Smart questions as a buyer to ask and what to request are imperative in order to protect you and your best interest. It is important to request copies of the by-laws, restrictive covenants, minutes, and financial statements; keep in mind this is not light reading by any means but must be done to determine if the community in which you are seeking to purchase is financially sound and makes sense. By providing these documents, as a buyer you will be able to determine and uncover important issues such as if the association has any pending lawsuits, or if they have been sued, if the dues will increase over time, if any special assessments are floating out there not included in the dues, if there are any improvements planned, the amount in reserves, and operating cash flow. Ask questions especially if you are looking to purchase in a multi-family community about the sound barrier between units, and if adequate insulation is between the units or if there is a problem with sound. The best people to really ask are the residents themselves as a property management company may not give you adequate information if any. In regards to HOA dues, know what they cover and what they don’t. Typically dues cover cable, the master insurance policy, trash and sewer, property management fees, amenity maintenance and upkeep, and security such as a guarded and gated entry and/or security guard.

In addition, know how many units or homes are within the community, what percentages of the properties are owned compared to the percentage that is leased out. If there are more rentals in the community as opposed to units owned, then one may want to rethink purchasing there because of a couple of factors: one is that if there are more than twenty five percent of units within a community that are being leased, many lending institutions will not loan money out to potential buyers. Another reason to rethink moving into a community that is overrun with tenants is that many tenants are not respectful to other residents or for that matter to the unit in which they are leasing. There are a good handful of tenants who are, but the ones who could care less are the ones who leave a bad taste in one’s mouth.

Other questions to ask are who the property management is company, what is their track record, and are they responsive to requests and are they professional and reputable.

Check out the amenities within the community, the parking availability and if one has pets, what the maximum number is or if pets are not allowed in the community at all. Find out if there are size restrictions for pets and if there is lists of non-acceptable pets such as aggressive breeds like Pit Bulls and the like. If one enjoys going to the pool or is a tennis buff, then inquire about the times the pool can be enjoyed and if the tennis courts are available when you like to play.

Getting all the information you can on the community in which you are looking to purchase is vital and knowing all aspects of the community’s HOA is just as essential in order to protect your livelihood, your interest and your real estate investment purchase.

Tim Ryan specializes in helping buyers find great deals on Naples Real Estate. You can visit Tim's website where you can find thousands of Naples homes for sale.