BEWARE OF HOAs! Check the Books!
Of course you think you want to live in a Home Owner’s Association (HOA) because there will be an entity who will keep the community looking nice. They will help keep up the property values and pay for maintenance and upkeep.
But, at what expense to you? What are the monthly or annual dues of the HOA?
What are the reserves of the HOA?
In today’s short sale and foreclosure market, many HOAs find themselves not being able to meet the annual budget causing cuts to services and limited reserves.
In Arizona Condominimum and Planned Community HOAs are governed by statute.
Before you purchase in an HOA, be certain to go over the HOA’s financial books and ask how many owners are NOT up to date with their dues. Ask what action(s) the HOA uses to collect delinquint dues. Ask if the HOA ever forecloses on an owner.
Why is investigating the HOA important to you?
Should the Association fall behind in collections, they have no recourse but to assess other owners or go without. It can take years to collect when owners allow their properties to go to foreclsoure…and sometimes the HOA will never collect. Going to court to get a judgement against an owner is not without its problems. There are bad feelings, court costs, expense of collecting on the judgement or keeping the judgement alive (has to be renewed every 5 years in AZ if not fulfilled).
Be careful before buying in an HOA.
Ask the HOA questions.
Ask other residents about the HOA.
Many buyers receipt the HOA documents but do not thoroughly read them prior to purchasing the property. Issues like pets, open garage doors… all make the new neighborhood seem like a penitentiary rather than a neighborhood after moving in when the fines begin or the notices arrive. Learn all you can before moving to an HOA.
Kathy Howe aka SedonaKathy
- how2arizona real estate
- www.how2educate.com
- www.how2realtyreferrals.com
- 928-274-4088
- kathy@kathyhowe.com
- LaTierra Plaza, 1120 W SR89A, Sedona, AZ 86336
- Proud resident of Uptown Sedona property – not in an HOA
Kathy is also a trained mediator in AZ (and HI) who does Justice Court mediations in Maricopa County, including small claims court HOA cases.
