Everything you need to know about the Homeowner Association

When you buy into a condo building, you are entailed to join that community’s homeowner’s association (HOA) and pay up the regular HOA fees for the upkeep of shared structures, communal areas, and shared exteriors. If you are considering purchasing a property that is governed by an HOA, you need to get to grips with how these associations work before looking for Toronto Condos for sale. HOAs not only impact your finances, they also affect your quality of life.

Acquaint Yourself with the HOA’s Rules

Search for your HOA’s covenants, conditions, and restrictions online, and look up information on what happens in case a rule is violated, such as being sued or fined. Make sure that you are looking at the updated rules before relying on it. Your real estate agent can provide you with this information or you can contact the HOA yourself.

Ask if the HOA can foreclose on your property in the event of failure to pay the HOA dues or fines due to violations of CC&R. Also pay close attention to the process of adding or changing the HOA rules or if the HOA meetings are held at a convenient time for you. If the rules leave a bad taste in your mouth, you should consider buying elsewhere.

Find Out if A Potential Home Is in Compliance

Buying into a problematic house can be troublesome, so find out if the home you are looking to buy complies with the HOA rules, or whether you would have to make changes. Has the owner altered the exteriors without HOA’s approval? Is the landscaping overgrown or dead? Does it need repainting? In such a case, you may be able to coax the owner into providing cash at closing or fix the issue as part of the sale agreement, so that you can take care of the problem son after taking possession.

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In addition, you also need to keep in mind that HOA laws vary in terms of who is responsible for fixing which issue. CC&Rs vary considerably from one community to other, and any authority is usually granted in writing as part of the HOA’s agreements.

Assess Environmental Practices

If you are a big advocate of environmentally friendly living, you won’t be too happy with the fact that some HOAs may dictate that you use sprinkler systems, pesticides, or fertilizers to keep your lawn picturesque. They may not allow any environmentally friendly form of landscaping, and may thwart you from installing solar panels, ban compost piles, and limit the size of gardens. Do scrutinize the fine print before finalizing the purchase.

Consider Your Temperament

Do you live by your own rules and hate being dictated what to do? If so, it may be exasperating for you to reside in a community governed by an HOA. Homeownership gives you the opportunity to make changes to the property according to your whims, but HOA can interfere with you. However, if you are one for uniformity and rules, and driving down a picture-perfect street every day after work is your dream, you might learn to appreciate these rules.

Find Out About the Fee Structure

Each community has its own fee structure, which is why you may need to ask the following questions from your prospective HOA:

  • How are HOA fee increases decided?
  • What is covered by the monthly dues? Is cable included? Are you still entailed to pay for garbage pickup?
  • How often are the HOA fees revised? HOA fee increases shouldn’t frequent more than once a year and go up according to the rise in the cost of services. It is recommended to scrutinize the HOA’s bylaws for their guidelines for fee increases. Even better, ask for the printed history of HOA annual dues for the past 10 years.
  • How big is the Reserve fund of the HOA? A lot of factors determine the size of a reserve fund, such as the condominium building’s amenities, condition, and age. When evaluating a condo purchase, have a CPA look over the financial statements to get a better idea of the condo financials
  • Can you glean a record of the past special assessments? Also check which assessments are planned for the near future. Economies of scale dictate that special assessments are higher in smaller HOAs and smaller in HOAs of large communities.
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When looking to buy into a potential building, compare its dues to average dues in other buildings in the vicinity. If you are not aware of the HOA ranges for your region, contact a real estate broker who knows the ins and outs of a particular HOA’s strategy. In general, all the members of a particular HOA decide on a fee considered average by a majority vote. HOA dues vary from time to time due any number of reasons.

Furthermore, before you get into a fight with the HOA, you will have to pay for the upkeep of the various recreational facilities in the HOA, even if you don’t use them. This is why you need to look into the hours for amenities such as court, gym, and the swimming pool, to see whether you would actually be available to use them, or will you be paying for things you will never be able to use. Some HOAs may have strict rules on guests using common facilities. If so, you can forget about that pool party.

Get a Copy of the Minutes from the Last HOA Meeting

You can garner an insight into the HOA’s policies by going over the meeting minutes from the previous meeting. You can even ask to attend a meeting before buying. You may inquire into:

  • The HOA’s process for resolving any conflicts
  • The past and current conflicts that the association had to contend with
  • If the HOA can sue someone? If they previously had, what was the outcome.

Lookout for potential drama. Almost all HOAs are ridden with petty politics and power trips. For a more accurate judgement, talk to some of the current non-board owners who have lived in the building for several years. Get acquainted with the HOA president and decide if you want this person dictating what you can do with your home.

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If the HOA is professionally managed by a private company, you need to look into it before making a purchase decision. However, in general, associations are managed by community residents who are elected by association members and hold their positions as volunteers. So, keep in mind that even though you feel comfortable with the current HOA management company or board, you may end up with a different association after you move in.

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