Considering buying a home in the Denver or Boulder Colorado area that has a Homeowner’s Association (HOA)? We’ve all heard horror stories about some over-controlling HOA’s that send you a notice for every tick tack violation. Well, I have written a list of questions to ask the HOA to make sure you don’t get stuck in a bad situation.
Here are questions to ask your HOA before buying a house or condo in Colorado ?
- How much are the dues?
- What is the history of the due increases?
- Does it include building insurance or not?
- What are the specifics of the insurance and what insurance will you be required to carry vs. the hoa carries it for you?
- Financials – look at the last few years of statements as well as the most current and the approved future budget. Are there reserves for things like concrete repair, deck repair, staining/painting/etc? etc? The big red flags are if you notice the area needs new sidewalks for example everywhere….and the concrete reserve is only $500. That means it either A. wont be fixed or B. they will tack on a special assessment to all HOA members to pay for it. Also, look at maintenance contracts like landscaping, security, snow removal etc. Do they look reasonable to you? Is one of the HOA members also one of the contractors?
- A special assessment is a one time fee to pay for something. You want to find out if there is the possibility of FUTURE ones, if there are any currently, and if there ever HAVE been too. They can be pricey. I know a downtown denver building charged everyone $5000 to replace the elevators. If there are any or have been any be careful. If you still think the place makes sense for you then you can still move forward with the purchase but negotiate to have the seller pay for the assessments.
- If you haven’t already – find out how much the transfer fees and and capital reserve requirements are when you close and negotiate to have the seller pay for them (unless you have already agreed otherwise)
- Find out how many units are owner occupied versus rented out. The HOA will know this. If it’s higher than about 10% rentals then don’t buy it.
- Find out the current status of all the membership dues. How many units are in the HOA and of that, how many are past due. How much?
- Get the minutes from the past years HOA meetings and read the to see what kind of stuff they talk about and this will tell you how picky they are and what type of violations they pursue action on.
This list is by no means comprehensive because every property and HOA is different. However, my hope is that this gives you a good starting point to learn about your hoa before buying a home so you make sure it’s a good fit for you and your family. If I can answer any specific questions about your situation please give me a shout!