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Health of an HOA?

March 13th, 2007 · Comments · By Matt

JD asked me today ‘do you know of any ways to assess the health of a condo home owner’s association?’ and I thought I’d throw this question out to the readers since you probably have much better suggestions than I do (actually I don’t have any.)

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  • EconE
    Thanks for the compliment Jo...appreciate it.

    anyhow...I wouldn't be so as much of a troll if Matt would participate a little more in the conversations. After all...he did start a thread with regards to the sub-prime implosion that was directed specifically towards me. Yet never followed up except to say he was busy. I even emailed him yet got no reply.

    I also do not like when people try to spin facts. If this is a blog for consumers then shouldn't the consumer also be informed of the fact that certain buildings are not reselling nor renting at paces claimed. Why is it that I get jumped on when I make the factual statement that SeattleRentals (Hi Ashley!) doesn't list all of their rentals on CL...not that it really matters.

    I'm aware that the RE community is aware of me...after all...Urbanlivingseattle quit sending me my daily condo update...hmmm...go figure.

    Anyhow...I'll take a serious stab at the HOA issue.

    Mike above made a very good comment about having an attorney look at the docs...sometimes people can be "sold" on a place that has low HOA and "turned off" to a place with high HOA. As Mike mentions...sometimes those dues can increase substantially.

    Low HOA does not necessarily equate with a good thing just like high HOA does not necessarily mean that the building is wasteful.

    In new construction...the "strength" of the HOA will take time to truly be assessable. There are many factors to consider.

    If I were in a condo that had an owners run HOA...I would possibly seek out info from long established condominiums as to what has worked for them...what the potential "surprises" are (nobody likes big assessments on top of their monthly HOA)...A couple buildings that I might suggest are Continental Place and Bay Vista Tower as they have been around for a long time and have had relatively low turnover in the last few years compared with many of the newer buildings.

    Having originally hailed from a Co-op on Central Park West in Manhattan...I'm pretty hip to the whole HOA deal...both condos & co-ops. (I learned this from my parents as I was too young while living in NY)

    For example...and although I am using a Co-op as my reference (they are different in NY than what you'll find as a co-op in Seattle). Co-ops want to have a strong HOA and adequate reserves. In certain co-ops they already know that they have adequate reserves and their major concern is...does the buyer? Some buildings won't even let you buy in unless you pass their financial scrutiny. They do this because they don't want a deadbeat that can't pay their dues and don't want to have to deal with liens/court/etc.

    So...in essence...it is hard to judge...especially with a new building as one factor that determines the financial strength and stability of the HOA is the financial strength and stability of the owners.
  • If you are buying into a fresh new construction / conversion building, you may also want to have a lawyer's opinion of the HOA governance documents. My HOA went for nearly a year without a legitimate HOA Board due to the inexperience of the conversion developers authoring the HOA governance documents -- subsequently some units saw HOA dues increase over 200% in the first year.
  • jo
    EconE - congrats, you've made it as the resident troll of urbnlivn
  • PhilW
    awwwww, quit picking on Matt (start your own website if you don't like this one)

    As for the topic -
    If the HOA is professionaly managed (good sign) check out the manager/company. Find out what other properties they manage and go take a look; ask questions. If the building is new, you want a manager who is willing to use all methods available to fix problems.
  • I amm not a condo professional, I am not a real estate agent nor a Realtor. Hey, I just bought my first one last week!

    This is also not a marketing blog. It's a condo blog run by a consumer for consumers.
  • EconE
    awwwww.whats the matter Matt?

    the condo professional that doesn't even know how to look into building financials.

    Pathetic...but I wouldn't expect anything less from a "markting" blog
  • EconE
    Comment removed by Matt.
  • Andrea
    I always look at how much is in the HOA's reserves...if there is at least $30K in reserves I know that the HOA can pay for smaller repairs and renovation measures. Plus it gives me an inkling to how the HOA (and thusly Board of Directors) handles it's finances. Of course this doesn't necessarily work for a new HOA.

    Once you get to STI, you can get a good picture from the resale certificate and the HOA's board meeting minutes. The more meeting minutes you receive, the better picture you'll have on current projects, assessments, etc.

    Another good way is to happen across current tenants in the building and ask them what they think of their HOA and property mgmt company...nothing beats first-hand information, if it seems reliable.

    I'm also a realtive newbie to HOA's and purchasing condos, but when I just purchased my first condo at the end of last month, these are the things I looked for to analyze my HOA...and on the advice of many others who are more experienced than myself.
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