Find the home of your dreams moments after it's listed - Not after it's sold!

What Condo Buyers Ignore But Shouldn’t!

Ginny…We’ve just purchased an apartment in San Diego — a condo, not a co-op. We’ve yet to move in, but just received word from the real estate management company who represents the building that anytime we want to do even a minor repair or alteration (e.g., add a bookshelf, change a tap), we have to give them seven days’ notice and pay them $150 for the privilege. Is this common, or is this extortion? It is my place, isn’t it? — Carole

Carole…First, I just want to acknowledge your frustration. It is actually very common for condo owners and owners of any unit or property located within a homeowners association (HOA) to have feelings of outrage at the lack of control they have. Unfortunately, there are costs that come as trade-offs for the advantages of living in a shared community, where the homeowners all share the costs of maintaining parts of the building or complex — and one of those costs is that there are rules and regulations that must be imposed.

I wouldn’t say that this particular fee is extremely common, in my experience, but HOAs, through their boards and their management companies, do have the power to impose all sorts of rules and fees that impact the ability of member homeowners to enjoy and improve their homes. It’s unfortunate that this fee came as a surprise to you, after closing, rather than you having learned about it when you should have, during escrow.

Here are a few guidelines for buyers-to-be and new owners of condos and other properties in HOAs:

1. Read the HOA disclosures — thoroughly. When you get into contract on a home that is located within an HOA, you receive a bulky stack of documentation about the association. It can be a mind-numbing, eye-twitch-inducing pile of bank account statements, historical documents and legalese. However, these materials are uber-important, as they provide the details and contours of this new business and interpersonal relationship you are about to embark on with your neighbors.

Things like the HOA’s plans for ongoing maintenance and upgrades, the HOA budget, the cash they have in reserve — all these things have the potential to impact your household budget.

For example, if the building needs a new roof and there’s not enough cash to cover the costs, most HOAs have the power to levy a special assessment on each owner for their share of the cost! The fact that you own your place means you also own some share of the responsibility for the building. That’s what owning in an HOA is all about.

Additionally, as you’ve learned the hard way, there are loads of HOA guidelines that may impact your lifestyle and your plans for your home. I have received dozens and dozens of notes over the years from condo owners like yourself protesting HOA restrictions on everything from parking to pet size and even flooring material and paint colors! Yes, the place belongs to you, but when you buy into a condo you opt into following the guidelines the HOA has in place for ensuring every owner can enjoy their home and all can live in peace.

I suspect the fee of concern to you covers the management company’s processing of your plans for modifying your home to ensure their compliance with HOA and other guidelines.

The ideal here is to read these documents thoroughly as part of your decision-making about whether to buy the property while you still have time to back out of the transaction if you don’t want to be bound by the HOA’s strictures.

2. Read more casual HOA member documents. Along with the formal HOA disclosures, condo buyers often receive a set of more casual documents, including a copy of the building rules and regulations, and the community newsletters. In my experience, these documents can actually be even more telling than the formal ones in terms of previewing for you the daily experience of living in the community. Yes, you’re likely to see a fair amount of minutiae, like recipes and block party announcements.

But you’re also likely to see things like board meeting agendas with line items like discussions of whether to raise the HOA dues, and conversations about any concerning, large repairs that might need doing. If you haven’t read these documents yet, you should now, to prevent further nasty or costly surprises.

In the same vein, I encourage condo buyers and new owners to talk with the building manager about common complaints and community issues (including fee increases) that are on the horizon, as well as connecting with other homeowners in the building or complex about their experience and any surprise costs or unpleasant rules they have encountered.

3. Participate in your HOA. Read the agendas of your HOA’s board meetings before they happen, attend the meetings and even participate on your board if possible. HOA boards ultimately have the power to impose dues increases, select the accounting and insurance vendors whose work and fees are so critical to the costs of living in the community, and select the contractors who do major building and community upgrades and repairs.

If you have a very strong issue with fees or rules that are currently governing your experience as a homeowner, the best way to address them is to become a vocal, active participant in your HOA board.