Checking HOA’s Finances

[Coronita]

Thumb through all the HOA's meeting notes and get a copy of the fiscal statement before  purchasing.

 

The HOA meeting notes usually gives a  pretty good indication of what sort of crap might be going on in your development (things breaking, crime,etc).

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[LuckyInOC]

What to request from the HOA:

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.

And thank God it will never work well.

Lucky In OC

[LuckyInOC]

What to request from the HOA:

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.

And thank God it will never work well.

Lucky In OC

[LuckyInOC]

What to request from the HOA:

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.

And thank God it will never work well.

Lucky In OC

[LuckyInOC]

What to request from the HOA:

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.

And thank God it will never work well.

Lucky In OC

[LuckyInOC]

What to request from the HOA:

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.

And thank God it will never work well.

Lucky In OC

[jpinpb]

Lucky – thanks for that invaluable information. We are not so desperate to do a condo. There’s been times we’ve considered it, but the HOAs are too much. The CCRs are ridiculous, and now hearing about the special assessments and other horror stories, we continue to be thankful to have dodged buying one.

I remember hubby pushing Savannah Terrace. I was very against it. I see places losing so much equity there now. My dad would tell me to steer clear of condos. He never fully explained all the reasons why. I guess too many to enumerate. But many are becoming obvious now.

[jpinpb]

Lucky – thanks for that invaluable information. We are not so desperate to do a condo. There’s been times we’ve considered it, but the HOAs are too much. The CCRs are ridiculous, and now hearing about the special assessments and other horror stories, we continue to be thankful to have dodged buying one.

I remember hubby pushing Savannah Terrace. I was very against it. I see places losing so much equity there now. My dad would tell me to steer clear of condos. He never fully explained all the reasons why. I guess too many to enumerate. But many are becoming obvious now.

[jpinpb]

Lucky – thanks for that invaluable information. We are not so desperate to do a condo. There’s been times we’ve considered it, but the HOAs are too much. The CCRs are ridiculous, and now hearing about the special assessments and other horror stories, we continue to be thankful to have dodged buying one.

I remember hubby pushing Savannah Terrace. I was very against it. I see places losing so much equity there now. My dad would tell me to steer clear of condos. He never fully explained all the reasons why. I guess too many to enumerate. But many are becoming obvious now.

[jpinpb]

Lucky – thanks for that invaluable information. We are not so desperate to do a condo. There’s been times we’ve considered it, but the HOAs are too much. The CCRs are ridiculous, and now hearing about the special assessments and other horror stories, we continue to be thankful to have dodged buying one.

I remember hubby pushing Savannah Terrace. I was very against it. I see places losing so much equity there now. My dad would tell me to steer clear of condos. He never fully explained all the reasons why. I guess too many to enumerate. But many are becoming obvious now.

[jpinpb]

Lucky – thanks for that invaluable information. We are not so desperate to do a condo. There’s been times we’ve considered it, but the HOAs are too much. The CCRs are ridiculous, and now hearing about the special assessments and other horror stories, we continue to be thankful to have dodged buying one.

I remember hubby pushing Savannah Terrace. I was very against it. I see places losing so much equity there now. My dad would tell me to steer clear of condos. He never fully explained all the reasons why. I guess too many to enumerate. But many are becoming obvious now.

[LuckyInOC]

I am not necessarily against HOA’s. My wife and I are considering buying a 2Bd/2Ba in RB as a second home, possibly for retirement. We would like something with low maintenance and a pool for our kids. This is difficult with part-time residency. I just think it is buyer beware. Newer PUDs (1990-2002) may not have these problems. Very new PUDs may have issues as indicated as initially stated.

However, I believe increase over 10% per year are required to be approved by the owners. High increases in dues after special assessments doesn’t make sense. The special assessment will cover the current shortfall. The additional dues required to cover the same roof should be spread over 30+ years.

Example:
Roof for each unit: $10,000.
No. of year life: 30 years

$10,000 / 30 years / 12 months = $27.78 per month.

This is without accrual of interest. There has to be other major issues for the dues to go from $150 to $350 per month.
The board may have just hired a very expensive Property Management Company.

Lucky In OC

[LuckyInOC]

I am not necessarily against HOA’s. My wife and I are considering buying a 2Bd/2Ba in RB as a second home, possibly for retirement. We would like something with low maintenance and a pool for our kids. This is difficult with part-time residency. I just think it is buyer beware. Newer PUDs (1990-2002) may not have these problems. Very new PUDs may have issues as indicated as initially stated.

However, I believe increase over 10% per year are required to be approved by the owners. High increases in dues after special assessments doesn’t make sense. The special assessment will cover the current shortfall. The additional dues required to cover the same roof should be spread over 30+ years.

Example:
Roof for each unit: $10,000.
No. of year life: 30 years

$10,000 / 30 years / 12 months = $27.78 per month.

This is without accrual of interest. There has to be other major issues for the dues to go from $150 to $350 per month.
The board may have just hired a very expensive Property Management Company.

Lucky In OC

[LuckyInOC]

I am not necessarily against HOA’s. My wife and I are considering buying a 2Bd/2Ba in RB as a second home, possibly for retirement. We would like something with low maintenance and a pool for our kids. This is difficult with part-time residency. I just think it is buyer beware. Newer PUDs (1990-2002) may not have these problems. Very new PUDs may have issues as indicated as initially stated.

However, I believe increase over 10% per year are required to be approved by the owners. High increases in dues after special assessments doesn’t make sense. The special assessment will cover the current shortfall. The additional dues required to cover the same roof should be spread over 30+ years.

Example:
Roof for each unit: $10,000.
No. of year life: 30 years

$10,000 / 30 years / 12 months = $27.78 per month.

This is without accrual of interest. There has to be other major issues for the dues to go from $150 to $350 per month.
The board may have just hired a very expensive Property Management Company.

Lucky In OC

[LuckyInOC]

I am not necessarily against HOA’s. My wife and I are considering buying a 2Bd/2Ba in RB as a second home, possibly for retirement. We would like something with low maintenance and a pool for our kids. This is difficult with part-time residency. I just think it is buyer beware. Newer PUDs (1990-2002) may not have these problems. Very new PUDs may have issues as indicated as initially stated.

However, I believe increase over 10% per year are required to be approved by the owners. High increases in dues after special assessments doesn’t make sense. The special assessment will cover the current shortfall. The additional dues required to cover the same roof should be spread over 30+ years.

Example:
Roof for each unit: $10,000.
No. of year life: 30 years

$10,000 / 30 years / 12 months = $27.78 per month.

This is without accrual of interest. There has to be other major issues for the dues to go from $150 to $350 per month.
The board may have just hired a very expensive Property Management Company.

Lucky In OC

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