HOA Doesn’t Enforce Rules or Fees
I went to an open house recently for a condo and was told the association does not enforce rules. The current owner (and other owners in the building) have not paid fees in 10 years. The realtor says I can use this as leverage when negotiating and can give me the HOA president's info to answer any questions but to make sure to have an attorney to mitigate any risks.
This would be my first condo (I have other long and midterm rentals). What questions should I ask the HOA president and what should be in place before closing? Any real estate attorneys have experience with this?
The unit needs cosmetic updates and the building looks to be in good shape in a good neighborhood.
Most Popular Reply
#1 Tenant Screening Contributor
- Honolulu, HI
Run, don't walk, away from this!. And don't believe a word the "President" tells you. You do not indicate what state, and condo law does vary somewhat, but the Pres does not control the decisions. Board members are equal, and all decisions are made either by majority of the Board, or for certain issues by majority of the entire membership.
The fact they have not paid fees strongly suggests they are deferring a lot of maintenance, and will need to "Special Assess" at some point to be able to repair/replace major elements.
EVEN IF they show you some large bank balance, without fully understanding the annual operating budget AND their reserve funding plan, you have no clue what future costs will be.
How many units are in the project? When were they built?
You also need a clear understanding, based on the actual governing documents for the project, of what elements are your responsibility, and what are the projects responsibility.
I reiterate...RUN!