Special Assessments in HOAs

Special Assessments 


Purchasing or selling a home that belongs to an HOA (Home Owners Association) involves reviewing an additional set of disclosure package. More specifically the HOA Seller package which will disclose all types of report and studies that reveal the financial strength of the community and how well funded the community is, to address the continual upkeep of the communal areas of the association which the HOA has to maintain. 

Remember, the HOA has to maintain external upkeep like the roof, painting, pools, gym, gardening, paving of internal roads etc…. All of this is paid through the monthly HOA dues and money is set aside to deal with large projects (like replacing the roofs). 

If the HOA does not manage the funds well and does not set aside sufficient funds to deal with emergency issues, the only way to address those unforeseen projects is to have each unit or door put up enough money either: 1) as a one time special assessment or lump sum or 2) raising the monthly dues to meet the burden over a longer period of time or both, in this case. 

As a buyer, you want to know what you are getting into. You don’t want to just rush through and miss the fact that the monthly dues are doubling and that there is an additional lump sum that each unit owner will be obligated to pay. This is a material fact that could impact whether you want to buy or not. As a seller, you want the potential buyer to know this material fact, so that they will not try to back out of the deal claiming they did not this was going to happen. 

These packages are hundreds of pages, and lot of information in multiple areas will alert the reader of a pending assessment or dues hike if they know where to look. Have an experienced agent point you in the right places to review so that all parties are going in fully aware of the financial strength of the association.

 Latest in Bay Area real estate, follow me on:

 Instagram 🏡 @stevemungroup 🏡

 TikTok 🏡 @stevemungroup 🏡 

Contact me to learn more this or any other properties DM or 650-605-3188 📲 ✌🏼