California Homeowners Associations: Do You Belong to One?

There are over 49,000 HOAs in California, and over 14 million people live in California homeowner associations. That's 35% of the of the California population and almost 25% of the total of California homeowners. 

Associations are made up most commonly of multiunit condominium buildings, PUD (planned unit developments) with single family housing, or other community apartment (own-your-own) associations, or stock co-operatives, making up a total 5.45 million homes. (Long Beach has all three types.)

If you were represented in the purchase or sale of a property inside of an association by a Realtor, your transactional documents make it clear that the buyer is wholly responsible for reading the CCRs and other HOA documents. Were the CCRs recorded? is the property defined as a "unit" or a "lot"? What are the use restrictions?  Has the required balcony/walkway/elevated elements inspection been completed and a report been made to the HOA? 

Has the HOA insurance been renewed? PUDs have an HO-3 policy, which is coverage for the entire lot and everything on it. Condominiums, co-ops, OYOs, and other community apartment projects have HO-6 policies, or "walls in" which is the airspace inside the unit (master policies cover the commons areas). 

There was a common practice in the past where property managers would charge sometimes excessive amounts for the transfer of HOA documents to a new owner, until a California law was passed stating an additional fee cannot be charged for electronic delivery, but the fact is that there is still a fee charged by management companies for their work time and effort even if delivered electronically. 

HOA members are required to follow rules in associations, along with all the laws which govern them and there are many, so if you're considering buying into an association you should do a self-assessment on your fit into this type of living situation. There are other restrictions such as parking, fines for not  following the rules, if you can rent out your unit or not, smoking and nuisance issues, can you use the unit for childcare, and is your view protected? 

Are you considering a unit located near the community pool? Maybe there will be noise issues at certain times. Know the difference between a Pet and a Emotional Assistance animal, different rules may apply.

Is the HOA self-managed (not unusual in small associations) or does it have a property manager, how well is the association funded (look at the reserve study)?  

Many buyers are attracted to HOAs as affordable options in more expensive SFR neighborhoods, they also require some study due to age of the infrastructure, insurance, HOA dues, purchase financing (is it VA or FHA  approved?) and other requirements imposed on owners.  

Condos are a road to ownership, and if you're a buyer find an agent with HOA experience.

 

 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996