Considering buying a home within an HOA? Know these 5 tips before making an offer.


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Did you know that California has one of the highest number of HOAs nationwide and almost 65% of California homeowners are part of an HOA? While there are pros and cons of buying/selling a home within an HOA, knowledge of common HOA issues can be highly impactful in ensuring a smooth transaction, especially when HOA disputes and violations can hold up the sale of a home.


What does this mean for a potential buyer?

  • HOA governing documents are considered equitable servitudes and buyers can be held responsible for unresolved non-compliance issues and fees that the seller never disclosed.

  • Lenders will typically need to investigate the financial health of the HOA associated with the property being purchased. If the HOA has any pending problems, it could result in loan approval delays and in some cases, denials.


What can you do to protect yourself when purchasing a home within an HOA?


1. Ask that a full HOA disclosure report be received prior to the contract’s binding date. If the HOA’s report cannot be provided by this time, consider adding a contingency to the purchase agreement.


2. Obtain a copy of the HOA's most recent financial report from the Seller or the Seller's agent.


3. Always check for pending lawsuits against the HOA your clients are moving into.


4. Be aware of new laws affecting HOAs (e.g., California passed several HOA-related laws in recent years).


5. Contact an HOA Legal Specialist when unique questions arise or when you need legal advice.