Why it’s Important to know about HOA’s

All Condominiums & Townhomes are not created equally.

Some condominiums are very well managed and some are poorly run and often times underfunded. If you are considering the purchase of a condominium make sure you do your homework on the HOA, not only about the condition of the individual unit you are interested in purchasing, but on the financial health and governance of the condominium as a whole.

Remember, you are buying into the entire project as much as you are the unit, and your decision will impact your daily living as well as the ability to re-sell the property in the future.

10 questions to ask when purchasing a condominium

1. What is the monthly HOA condominium fee and what does it pay for?

The monthly condominium fee can range quite dramatically from condominium to condominium. The HOA fee is a by-product of the number of units and the annual expenses to maintain the common areas; whether the condo is professionally managed or self-managed by a board of directors made up of owners; the age and overall condition of the property; and other variables. For budgeting and financing purposes you must know the amount of the HOA fee and exactly what these fees pay for.

2. What are the condominium rules & regulations?

Condominium rules can prohibit or limit pets, your ability to rent out the unit,
and make renovations to the property.

Make sure you carefully review the bylaws and any deed restrictions
before you consider making an offer on a condo property.

3. How much money is in the capital reserve account

and how much is funded annually?

The capital reserve fund is like an insurance policy for the inevitable capital repairs every building requires. As a general rule, the fund should contain at least 10% of the annual operating budget, and in the case of older projects even more. If the capital reserve account is poorly funded, there is a higher risk of a special assessment. Try to get a copy of the last 2 years budget, the current reserve account funding level and any capital reserve study.

4. Are there any contemplated or pending special assessments?

Special assessments are one time fees for capital improvements payable by every unit owner. Some special assessments can be a couple hundred dollars while others can run in the thousands. You need to be aware if you are buying a special assessment along with your unit. It’s a good idea to ask for the last 12 months of HOA meeting minutes to check what’s been going on with the condominium.

5. Is there a professional management company or is the association self-managed?

A professional management company, while an added cost, can add great value to a condominium with well run governance and management of common areas.

6. Is the condominium involved in any pending legal actions?

Legal disputes between owners, with developers or with the association can
signal trouble and a poorly run organization.  
Legal action equals attorneys’ fees which are payable out of the condominium budget and could result in a special assessment.

7. How many units are owner occupied?

A large percentage of renters can create unwanted noise and neighbor issues. It can also raise re-sale and financing issues with the new Fannie Mae and FHA condominium regulations which limit owner-occupancy rates. If you are using conventional financing, check to see if the property is a Fannie Mae approved condo. If FHA financing, check if it’s an FHA approved condo.

8. What is the condominium fee delinquency rate?

Again, a signal of financial trouble, and Fannie Mae and FHA currently require that the delinquency rate be no more than 15%.

9. Do unit owners have exclusive easements or right to use certain common areas such as porches, decks, storage spaces and parking spaces?

Condominiums differ as to how they structure the “ownership” of certain amenities such as roofs, decks, porches, storage spaces and parking spaces. Sometimes, they are truly “deeded” with the unit, so the unit owner has sole responsibility for maintenance and repairs. Sometimes, they are common areas in which the unit owner has the exclusive right to use, but the maintenance and repair is the responsibility of the HOA.

10.  What Does The Master Insurance Policy Cover?

The condominium should have up to $1M or more in coverage under their master condominium policy.  For your own protection, you should always buy an individual policy covering the interior and contents of the unit (often referred to as a “walls in policy”), because the master policy in most cases does not cover damage or loss to personal possessions and interior damages in the event of a roof leak, water pipe burst or other problem arising from a common area element. Ask for a copy of the master insurance policy and don’t forget to check the fine print of the by-laws.


Please contact us for additional information at, were always here to help……

Joseph Garcia

Joseph Garcia is a proud native Texan, born in Lubbock, raised in San Antonio and loving Dallas. Everyday Joseph uses his more than 16 years experience in the Real Estate industry to help better serve his clients. Joseph started his career in Property Management, Apartment Locating, and Leasing, then quickly transitioned into becoming a full-time residential agent in 2007. Today, Joseph continues to focus on Residential sales and with his broad knowledge base can even assist his clients with Commercial deals.

Joseph is dedicated to helping individuals and families find their dream home and more importantly, the lifestyle they desire! What clients love about Joseph the most is his passion for life and​ ​outgoing personality. When it comes to marketing and selling homes "JoJo Sells" uses the power of Social Media to move homes quickly.

​Joseph also prides himself in making sure each deal gets to the closing table​ no matter how difficult the deal is​. He also goes above and beyond to ensure his clients find the perfect home match whether it's personal or investment. Joseph's extensive network of Real Estate professionals in Sales, Leasing, Lending, Home Inspection, Home Repair and Title make every transaction as seamless as possible.

Joseph carries the distinguished Certified Luxury Home Marketing Specialist (CLHMS) Designation from the Institute for Luxury Home Marketing and a Global Elite Certification which provides access to a Global Real Estate Network.

Joseph completed the Metrotex Leadership Academy class of 24 and immediately after served as a ROC to mentor the Medical / Sports day of class 25. In 2015 he partnered with 5 other individuals to create and serve as the Marketing Chair for the Non-Profit Gay And Lesbian Organization of Real Estate (GALORE) to address unique Real Estate issues facing the Gay and Lesbian community. Joseph is also a member of the National Association of Hispanic Real Estate Professionals (NAHREP), as well as Young Professionals Network (YPN) & Metrotex Leadership Alumni.

He currently services as the Sales Director in the VIVO Uptown office and every day shares his vast Real Estate experience by coaching and mentoring new agents. When you're working with Joseph, you're working with not only a fun agent, but one of the best!

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