HOAs in financial trouble leave homeowners picking up costs

Are you looking to purchase a property with a Home Owners Association?

In my Article, posted HERE,  I made mention of some the of Restrictions that Home Owner Associations place on their residents, however, in this post I wanted to make the reminder that you, as a Buyer, should also look  at the financial stability of the HOA that you are desiring to purchase into.

Because of the number of current Foreclosures, some Home Owner Associations are not collecting the monthly dues necessary to keep their "reserves"* up, which could mean that homeowners in the community could find themselves facing special assessments to cover costs of any repairs that need to be done. (*reserves: funds earmarked for future use, such as future repairs expected)

Amenities such as pools, roofs, rec areas, etc, are usually paid for from the HOA's reserves ... monies, which are collected monthly from the homeowners, knows as monthly dues, and kept in a reserve account for when needed.

But what happens when the monthly dues needed are not being paid, because too many units in the community are vacant due to Foreclosure?  The reserves drop and the up-keep, maintenance and repair of the community could suffer ... or special assessments can be demanded of the current homeowners.

When you, as a potential Buyer, get your HOA Documents during Escrow, don't be tempted to lay them aside, thinking they are not important to you as an individual.  Read the Minutes of the HOA Meetings.  Read any Financial Statements supplied.  Look to see if any special assessments are coming up, or have been charged recently to the homeowners.  And check to see if your particular unit/property has any un-paid dues which you may be responsible for if you purchase the property.

____

Above information provided as a courtesy and not meant as legal advice. 

For all of your Real Estate needs in the Santa Clarita Valley, 

do not hesitate to contact:

LeeAnn Bell ... 661-309-2364

or email me at:  SantaClaritaRE@gmail.com

DRE License #01260650

Comments Welcome

I suggest you have an appropriate professional go over all your HOA Documents with you, before closing Escrow.   

______