Avoid These 3 HOA Nightmares

If you’re planning to buy a home in a community managed by a homeowners association (HOA), you’ll need to join, pay fees, and adhere to the association’s rules as a member. Your purchase contract should include a contingency that gives you the right to review the HOA’s financial records and its covenants, conditions, and restrictions (CC&Rs) so you’ll know whether the HOA is in good financial health and has sensible rules and regulations.

Be on the lookout for the following:

High monthly dues: HOA fees can affect your mortgage qualification by reducing the amount you can borrow. Only consider properties with amenities you’ll genuinely use to avoid unnecessary costs.

Not enough reserves: Reserves are fees set aside for future maintenance, but if the HOA doesn’t charge enough in fees, you may be hit with “special assessments” to cover unplanned costs. Look at how and when reserve monies will be used.

Too many regulations: Rules should only address personal safety, home values and the HOA’s financial health—not limit front doors to three bland paint choices.