HOA Tips for Homebuyers: What to Look For Before You Sign

HOA communities can be great investments - or financial landmines. Here's what our team looks for before recommending any HOA property to a buyer.

Before falling in love with any HOA property, the first thing we do is pull the financials. A healthy HOA maintains reserves that cover at least 70% of its projected replacement costs - roofs, plumbing, elevators, parking structures. When reserves are underfunded, assessments get passed to homeowners, and they arrive with little warning. We've seen $10,000–$30,000 special assessments levied on buyers who closed just months earlier.

The CC&Rs (Covenants, Conditions & Restrictions) determine how you can actually use your home. Can you rent it out? Are short-term rentals like Airbnb prohibited? What are the rules around pets, parking, and exterior modifications? In South Bay, many HOA communities have strict rental caps - sometimes as low as 10–15% of units - which can affect your ability to rent in the future and directly impacts your buyer pool if you ever sell.

Monthly dues are only part of the picture. Ask for the past three years of meeting minutes. These documents reveal pending litigation, deferred maintenance, neighbor disputes, and how the board handles complaints. A community in good standing has regular, well-attended meetings and clear financial oversight. Red flags include board turnover, deferred votes on major repairs, or years of minutes that are suspiciously brief.

Finally, get the current delinquency rate - the percentage of owners behind on dues. Anything above 10–15% signals collection problems, which constrains the HOA's ability to maintain the property and can affect your ability to get conventional financing. Lenders often require HOA recertification for units in communities with high delinquency. Our team reviews all of this before we ever recommend an offer.