Are You Prepared for Homeowner Association Life?

know the rules

Moving into a community governed by a homeowners’ association (HOA) is a very big decision. How the association functions—legally, politically, socially, and financially—are important to not only your investment but also your quality of life. Here are five things you should do before becoming the newest member of an HOA.

Review the HOA’s governing documents. Before you sign on the dotted line, study the HOA’s Covenants, Conditions, and Restrictions (CC&Rs). Familiarize yourself with the rules and regulations of the association and determine if you’re able to adhere to them and if they’re compatible with your lifestyle. These rules and documents can be lengthy, but be sure to take time to read them carefully. If the legal wording is confusing, ask an attorney to review the documents with you.

Learn about the HOA’s finances. Find out everything you can about the association’s finances and even talk to the board treasurer if you have the opportunity. Ask about the budget, if dues will increase, if any special assessments are planned, and if they have an existing and adequate reserve fund.

Attend a board meeting. While rules about non-residents attending board meetings vary by association, if it’s possible, attend a board meeting. Attending a board meeting will give you insight into the management of the association. You’ll be able to see if the meetings are well-run and confirm that board members are professional and treat residents fairly and with respect.

Talk to residents. The best way to learn about your association is by talking to the people who live there. Ask for their perspective on the finances, management company, operations, group dynamics, how well the association carries out its goals, and any neighborhood politics. These people could be your future neighbors!

Understand how HOAs work. Before moving into one, it’s crucial to have a clear understanding of how HOAs are legally structured and how they conduct business. The more you know, the better off you’ll be!

Courtesy of Associa, an HOA management company

Five Days to Cancel Escrow

When you enter into a purchase agreement to buy a home or unit in a common-interest community, in most cases you should receive either a public offering statement, if you are the original purchaser, or a resale package, if you are not the original purchaser. The law generally provides for a 5-day period in which you have the right to cancel the purchase agreement.

The 5-day period begins on different starting dates, depending on whether you receive a public offering statement or a resale package. Upon receiving a public offering statement or a resale package, you should make sure you are informed of the deadline for exercising your right to cancel. In order to exercise your right to cancel, the law generally requires that you hand deliver the notice of cancellation to the seller within the 5-day period, or mail the notice of cancellation to the seller by prepaid United States mail within the 5-day period.

For more information regarding your right to cancel, see Nevada Revised Statutes 116.4108, if you received a public offering statement, or Nevada Revised Statutes 116.4109, if you received a resale package.