Purchasing a home can be a truly exhausting and tiring task for a future homeowner. Apart from finding a great home, you also have to look into the location and the community you are moving into. Moreover, you have to be knowledgeable about the HOA you may decide to live in. While trying to become knowledgeable about your potential purchase, not only should you become familiar with all of the rules and standards in the HOA, but also look into its financial situation and your potential homes history. How the association manages its money should be just as important to a buyer as the asking price.
Homeowners dues are intended to serve the purpose of maintaining the community in which you live, in which an elected board has been chosen to spend this money in the best interests of your community. Unfortunately not all homeowners pay their dues, and in almost every association this is accounted for. What is the number of residents not contributing their dues amount? If the association you plan to live in has a rapidly increasing amount of outstanding homeowners, then this may be the sign of a slight future problem.
If associations are having trouble collecting dues, and their standard procedures to collect these monies is not working, then the resulting outcome could lead to them having to arrange a special assessment. Special assessments are designed to cover cost of major problems, but in these rare situations they may be used as a life line to keep things rolling in your community and to collect more money from those who are currently paying. Was the previous owner living in your potential dream home paying his or her dues? This question is equally important to you as a home buyer as the one asked earlier about your future associations overall financial well being. Typically when a home sells the outstanding homeowner’s dues are covered within the closing documents as to which party will be responsible for the outstanding debt. Unfortunately these dues are not accounted for in all closings and you as the new home buyer could end up footing the bill for the previous owners.
All states have different statutes and all governing documents are written up differently. The best thing you as the potential buyer can do is ask for advice because there are plenty of people willing to help.