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Feldsott Lee Pagano & Canfield
Orange County Homeowners Association Law Firm

What potential homeowners' association members need to know

When buying a car, signing up for a credit card or undertaking any other potential financial obligation, most California residents take the time to look into the fine print. What kinds of hidden costs or surprises could come with those obligations? Prospective homeowners' association members may want to ask themselves the same question.

During the homebuying process, someone may tell a homebuyer about the need to pay fees to an HOA. This may prompt questions regarding the rules, along with the covenants, conditions and restrictions, or the CC&Rs as they are commonly called. Another issue that may require some inquiry is regarding fees.

The number quoted to a prospective buyer may not be the whole story. Understanding the financial situation of the HOA may help. It may seem surprising to know that up to 70 percent of the HOA's across the country do not have the funds they need to take care of the communities they serve.

This means that an HOA may need to increase fees. If the situation is dire enough, a special assessment may be levied on homeowners that could be substantial. This could jeopardize any budgeting in which an HOA member may engage.

California residents who are looking to buy a home in a community with an HOA may want to understand what it could mean financially to become homeowners' association members. It may be worthwhile to have all of the HOA's documentation reviewed in order to determine whether becoming a member would be in a particular homebuyer's best interests. Even if he or she buys in a neighborhood with an HOA that may be on shaky ground, at least it will be understanding the potential financial risks.

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