Condominiums and other property located in Homeowners Associations (HOAs) are very common in our resort real estate market. Our clients that are considering a Park City or Deer Valley real estate purchase always have questions about the HOA that their potential purchase is located in.
Evaluating the HOA is a critical part of our clients due diligence process, and there are many frequently asked questions:
- Rules and regulations. Are nightly rentals allowed? Are pets allowed?
- Upcoming projects and or special assessments- will there be a special assessment for a big project coming up that I will be responsible for?
- How much of the monthly/quarterly dues go to reserves for upcoming projects?
- Are there any utilities included in my HOA dues?
- What services does the HOA provide (snow removal, landscaping, so on).
- Is the HOA in good financial shape? Do they have money in the bank?
- Are monthly dues likely to go up?
- What maintenance does the HOA cover? Roof? Windows? Decks?
You may have differing questions, but don’t worry- during your due diligence period, you will be able to look over HOA documents and ask questions. If concerns can’t be resolved, our real estate purchase contract allows you to cancel, without penalty, prior to the Due Diligence Deadline.
Once you have selected a property and are under contract, the Seller will be obligated to provide you with several documents. Included in these documents are
- The CC+R’s for the HOA (includes the rules and regulations). By reading these, you should be able to verify that your planned use of the property is allowed. For example, whether or not nightly rentals or pets are permitted or prohibited.
- A copy of the most recent budget and financial statements.
- A copy of the most recent meeting minutes for the HOA. Most HOA members meet once a year. You are able to see the minutes from the meetings, and gather useful information about the priorities or concerns of the HOA members.
- Seller Property Condition Disclosure Form. This form will include contact information for the HOA management. Also, the owner should disclose any upcoming assessments that they are aware of.
Most HOAs are managed by a local property management company. These companies manage the HOA’s finances, schedule needed maintenance and enforce HOA rules. These companies can be a great resource, and we always strongly encourage our clients to discuss any questions or concerns directly with these management companies during their due diligence period.
Experienced, local real estate agents also may be aware of HOA issues in advance, and can help you save time by avoiding projects that incompatible with your needs.
Questions about Park City or Deer Valley real estate? Contact Quinn Eichner at 435-640-1854.