The four HOA documents worth reading before any offer.
HOA Documents Worth Reading Before You Offer
Short answer
Read the budget, the reserve study, the rules and the last year of board minutes. Together they show whether dues are likely to rise and how the community handles disputes.
Homeowners association documents arrive in a thick bundle during escrow, and most buyers skim them. Four of them deserve a careful read because they predict how much you will pay and how the community will treat you.
The four documents
- The budget. Shows where dues go and whether income covers costs without dipping into reserves.
- The reserve study. Estimates future repairs such as roofs, pools and paving. Underfunded reserves often mean special assessments.
- The rules. Covers parking, rentals, pets, exterior changes and noise. Check anything that affects your plans.
- Board minutes. A year of minutes shows disputes, upcoming projects and how decisions get made.
70%
funded or higher is a common rule of thumb for a reserve account that is unlikely to need a special assessment soon.
“The minutes are where you learn whether a new roof or a lawsuit is on the horizon.”
Arizona law gives buyers a review period for HOA documents in most resale purchases. We help clients read them within that window and flag anything worth a question, such as rising dues, rental caps or pending litigation.
Questions readers ask
Can an HOA limit rentals?
Many can, through their governing documents. Investors should check the rules before writing an offer.
What is a special assessment?
A one-time charge to owners to cover a cost the reserves cannot. Healthy reserves make them less likely.
Discussion
Rosa M.
This was useful. We are looking at two homes next month and will take this list with us.
Marcus Reyes
Glad it helps, Rosa. Send us the addresses and we will add our notes on both.
