by Osman Parvez
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We’re back. After a multi-week adventure in the lovely Nevada desert, we’re saddled up and ready to ride. Let’s kick off the fresh content with a question about HOA dues.  


Q: I’m considering buying corner loft condo. The ask price is $299k and HOA fees are $385/month which include nothing other then exterior maintenance and hazard insurance. 
And am I crazy for thinking the dues are absurdly high for offering ZERO amenities?


A: Buying a property with an HOA is akin to an investment partnership over which you have very little control. Do your due diligence carefully. Amenities are only one aspect of the value you receive for your dues.   

Deferred maintenance at a Boulder condo complex (pic by Osman)

The easiest and cheapest way to begin your due diligence is to walk around the complex and look for clear signs of neglect. It’s usually a tip off to mismanagement and/or an upcoming special assessment. At a minimum, it’s specific issues you can ask about. 


To understand the full picture, you’ll need to evaluate the reserves, review the reserve study, and do your own assessment of deferred maintenance. Your Realtor will help you obtain the HOA documents. When you receive them, carefully read the minutes of the last few HOA board meetings for discussion of special assessments, a reserve study, unfunded repairs, and pending litigation. Review available financial statements and pay particular attention to reserves. Call at least one board member, the HOA manager, and talk to at least one or two owners. Ask directly about these matters.

If you’ve done the above, you’ll have a much better idea whether $385/mo is expensive. If the HOA is adequately reserving for proper maintenance and repairs and has no pending litigation, or history of litigation, $385 is cheap. Better to pay $385 than pay $200/month only to get hit with a massive special assessment a few months into your ownership.


Pro tip: In Colorado, the Real Estate Commission approved contract contains a specific deadline for Buyers to review HOA documents and get comfortable with the HOA. It’s in section 7. 


§ 7.4. Conditional on Buyer’s Review. Buyer has the right to review the Association Documents. Buyer has the Right to Terminate under § 25.1, on or before Association Documents Objection Deadline (§ 3), based on any unsatisfactory provision in any of the Association Documents, in Buyer’s sole subjective discretion.

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