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  • Writer's pictureShaila Campbell

10 Questions to Ask the HOA

Before you purchase, here are a few things to know or ask about the Homeowners Association. In the process, you'll learn how responsive and organized it's members are.

1.) What percentage of the units are owner-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2.) What covenants, by-laws, & restrictions govern the property? During escrow you'll get a full set of documents that govern the homeowners association. This includes house rules, financials, meeting minutes, the insurance summary, etc. Be sure to take the time to read thru them carefully. And, ask for any updates to documents during your escrow period. If a new Board of Directors meeting minutes comes out, you should have it before you close.

3.) How much does the association keep in reserve and are there any large capital improvements not budgeted for? Many of the structures in Hawaii were built in the 1970s, large capital improvements such as elevator modernization, spalling repairs, and plumbing retrofits are common and expensive. You'll want to know if your HOA has budgeted for this, if they plan to issue a special assessment, or take a loan to cover the cost of repairs.

4.) What special assessments have been mandated in the past 5 years? Some special assessments are unavoidable. But repeated assessments could be a red flag about the condition of the building or the board's fiscal policy.

5.) What does the HOA fee cover? This sounds like a no-brainer, but it's always good to double check. While most HOA fees include water and sewer, some condos (particularly in the Hawaii Kai area) do not include the sewer fee into the HOA. Is there a separate marina fee? If cable is included, is it basic cable? Is electric billed separately to homeowners or are electric bills received by the HOA and billed on your monthly statements?

6.) Is the condo building in litigation? This is never a good sign. If the builders or homeowners are involved in a lawsuit, it could deplete reserves. Find out why it's in litigation. This may also affect financing for the building, particularly if the litigation is due to a construction defect.

7.) Are multiple associations involved in the property? In large developments, there may be a master association as well as a smaller association into which you're buying. Do they charge monthly or annually?

8.) Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions.

9.) Who manages the association? Many associations hire a property manager designated to assist them with the accounting and collecting of HOA fees, capital improvements, reserve studies, etc. How long have they been managing it? Or, is your association self-managed?

10.) Don't forget to read the insurance summary. Your association will likely carry a master insurance policy to insure against loss. Understand if it includes hazard insurance, flood insurance (if required), or hurricane insurance? What are the limits? Always feel free to call the HOA's insurance carrier directly for any of your questions.


Questions? For more info, call Shaila at 808-741-7155 or email Hawaii Homes & Estates LLC. License No: RB-20456.


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