Welcome to the latest installment of our real estate question and answer series. This week we focus on your questions about homeowners’ associations or HOAs. Every week we answer the questions that you are asking on social media and in the comments. Watch the video for the quick answers or read on for more detail.
Q: What is an HO-6 insurance policy?
A: This is a homeowner’s policy that is typically for condos, coops, or TICs. The policy covers the interior of the unit and may cover personal property. This type of policy works with the HOA’s policy which covers common areas such as the building structure and hallways.
Q: What are HOA dues?
A: Not just for condos, HOA dues apply to any property within an HOA. This could be a single family, TIC, condo, coop, or even commercial property. The dues are paid to a homeowners’ organization for common area maintenance and expenses. These may include doorman, security, building or site maintenance, insurance, etc.
Q: What to look for when buying or selling within an HOA?
A: Buying or selling within an HOA creates another layer that must be considered when determining the value of a property. Review the CC&R’s which govern what is allowed, such as pets. Generally, the more restrictive the CC&Rs are, the more limiting the buyer pool is, though carefully designed CC&Rs can help improve property value by ensuring good maintenance and a pleasant esthetic throughout the community.
The strength, such as reserves on hand, and amenities provided by the HOA in relation to the dues paid also affects the overall value of the property. Higher dues come with an expectation of more amenities and higher reserves.
It is important to review the HOA meeting minutes and discover if any special assessments are coming up.
We help clients buy and sell all types of property within HOAs and can help make sure a seller discloses everything necessary and that a buyer knows what to look for. Comment below or contact us today if you have a question!