Dreaming of low-maintenance living? Well you're in luck! Here is some great information on Common Interest Communities (CIC) and HOA's.
- The first thing to look at would be the Resale Disclosure Package: Every buyer has 3-10 days from receipt to review the Resale Disclosure Package. The package includes, but is not limited to: A 9-12 month budget and financials, the Resale Disclosure Statement, Rules and Regulations or Covenants and Restrictions, and Articles of Incorporation, By Laws & Declaration. The Articles of Incorporation are just the original documents when the HOA is created.
- Budget and financials: Be sure to look at the reserve amounts to ensure it’s healthy enough to cover large projects such as new roofs/siding. Newer developments haven’t had time to build up a reserve which could mean possible assessments for homeowners in the future. Reserves are something often looked over but it is a crucial aspect to look at when finding the best low-maintenance living option.
- Resale Disclosure Statements are a summary of the development’s monthly dues, past dues, hazard insurance costs, any liens or lawsuits on the development. Buyers sign this after they have received and read through the entire package, acknowledging they accept the documents.
- Monthly dues: What do they include? Not just the monthly amount, which typically includes the snow/lawn, sanitation, hazard insurance, community pool, and professional management, but who is responsible for what in the home? Roofs, windows, doors, decks, garage doors? What are the rules for getting these items replaced?
- Insurance: Buyers pay for what’s called an HO6 policy that covers all the personal property and some structure items (cabinets, flooring, ceilings). The HOA carries hazard insurance that covers the exterior like roofing and some interior structure items like cabinets, flooring, depending on the claim. Some HOA’s choose not to have a comprehensive policy to keep their dues down. So if there is hail damage, you may be responsible for covering some of the expenses.
- Finally, the Rules and Regulations: Biggest things to look for in the rules and regs are whether the development allows rentals, if so how many units are owner occupied and how many are currently rented? You want a development that allows rentals but not development that has 30% or more rentals if you want to keep your resale value up. Also look for things that may affect your quiet use and enjoyment of the property, pets, sheds, noise control and parking.
There are a lot of things to consider when looking to buy or rent within an HOA or CIC but hopefully these few tips help! If you are in need of advice in this area please reach out to someone on our team.
