If you’re in the market for a new home, property in a community association may draw your interest. Many homeowners prefer association managed maintenance and amenities that an association offers. While many properties are subject to some covenants, condominium and homeowner associations have a unique set of operational and financial issues that potential buyers must consider.
Understand the HOA Financial Picture
To avoid surprises, get the complete financial picture. A well-managed association should have a balanced budget and funded reserves for future maintenance/replacement plans. Ask about the history of past and special assessments.
- How much are the assessments and what’s covered?
- What is the history of increases in the past 10 years?
- What is the history and future plans for special assessments?
- How does the reserve fund compare to current reserve plan?
- What are the delinquency percentages?
- Has the HOA been sued, and if so, how was it settled?
Can You Follow the HOA Rules?
Following rules is a must when you live in an association. However, rules vary from one association to another, so it’s important to understand the rules that govern an association where you are considering purchasing a home. The rules need to fit your lifestyle needs. For example:
- What are the parking rules?
- If there’s a potential to rent your home, what are the rental guidelines?
- What are the fines and foreclosure policies for CC&R violations
- How are the association rules enforced?
- What are the landscaping rules (if you’re a gardener, etc.)?
- What are the rules that govern the amenities?
Recognize Community Association Dynamics
Disagreements are common when multiple people manage a community. It’s how the disagreements are handled that tells the story. While different Board members can change the dynamics, neighborhood politics can be difficult to overcome when allowed to rein. A property management company can improve neighborhood dynamics by taking on some of the day-to-day management. Some questions to ask are:
- Who runs the association (volunteer Board, property manager or management company)?
- If the association is externally managed, ask for references.
- What is the process for resolving disagreements?
- How were recent disagreements resolved?
- How are homeowners involved in volunteer committees and running the association?
Becoming a homeowner in a managed community is a personal choice. It’s a choice that works well for many people. Just a little homework can tell you if it’s the right choice for you.
Wise Property Solutions is a property management company serving East Tennessee with offices in Knoxville, TN and the Tri-Cities, TN. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management. The firm is East Tennessee’s only Accredited Association Management Company (AAMC®).
Knoxville, TN: 865-643-8989
Tri-Cities, TN: 423-926-7373