When buying a condo or townhouse, it’s crucial to review the HOA documents thoroughly. These documents typically include:
- CC&Rs (Covenants, Conditions, and Restrictions)
- Declarations and Bylaws
- Rules and Regulations
- Current Year Budget
- Meeting Minutes
- Reserves Study
These documents give you insight into the community and its financial health. If you’re purchasing a single-family home or a multi-unit building, these details may not apply to you.
In the Bay Area, sellers usually provide these documents upfront so you can review them before making an offer. However, if the documents are not provided or seem incomplete, it's wise to include a contingency for HOA documents in your offer. This contingency will protect you and allow you to cancel the contract if any issues arise with the HOA.
Here’s why reviewing these documents is essential:
Community Stability: You're not just buying a unit; you're buying into a community. Check if the community is financially stable or if there are potential issues.
Special Assessments: Look for any upcoming major maintenance projects that might require additional contributions from homeowners.
Lender Requirements: Lenders can be strict about the condition and financial health of the building and HOA, which might impact your loan approval.
Additionally, familiarize yourself with the building’s rules, such as:
- Pet restrictions (e.g., number, breeds, weights)
- Rental restrictions
- Percentage of owner-occupied units vs. rented units
To ensure you’re making an informed decision, read all documents carefully. Note down any questions or concerns, so we can seek clarification or request further documentation. Meeting minutes are particularly important, as they often reveal the true state of the building and any planned major repairs.
After reviewing the documents, email me with any questions you have and let me know if you’re comfortable moving forward, if you wish to cancel the contract, or if you need additional information.
Check this article for the list of questions to ask when reviewing the HOA documents.
