1. Request a copy of the CCR’s and By-Laws and read them at least twice. Every potential buyer is required to be given these when asked.
2. Request a copy of the Reserve Study. It should tell you the estimated replacement cost of all major maintenance items owned by the HOA and how long before it will need to be replaced, and how much is saved towards that replacement. If you don’t understand the Reserve Study information, have an accountant or CPA review it with you.
3. Request to review all financial statements at least for the last 3 years. They are required to make this available at the HOA office or Property Management office during regular business hours. You will not be able to see foreclosure and penalty assessments for individual units or persons. But, you should be able to see the summary data. Again, if you don’t understand this information, have an accountant or CPA review it with you.
4. Request a list of past Special Assessments by the HOA.
5. Request to review all meeting minutes for the last 3 years.
6. Knock on doors in the complex and talk to 10 owners. 8 of 10 will have no clue what is going on with the HOA. 1 of 10 will true fully tell you everything that’s going on. The last one will be a present board member. Don’t believe a word he says.
My brother and I lived in a 120 unit PUD built in the ‘70s with very low dues and low reserves. He was on the Board as secretary. The board was insistent to keep everything from the owners. We created an unofficial news letter to pass out in the Complex. The other board members hated it (us) for informing the other owners.
But just like our state and federal government, it requires and informed Citizenry for it to work.
