Q: I am in escrow for a condo where the HOA is 42% funded. How concerned should I be about this?
Each unit is underfunded by $6,500.
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- California
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A:
When you're in escrow for a condo with an HOA that's only 42% funded, it's crucial to understand the implications. An underfunded HOA can lead to unexpected special assessments, which means you might have to pay extra fees to cover shortfalls for maintenance, repairs, or emergencies. Since each unit is underfunded by $6,500, you should consider how this could impact your finances.
Review the HOA's financial statements and reserve study. These documents will provide insight into the current financial health of the HOA and any upcoming major expenses. If the HOA lacks sufficient funds, there could be significant increases in HOA dues or special assessments in the near future.
Consult with your real estate agent and possibly a real estate attorney to understand the risks involved. They can help you evaluate whether the current funding level of the HOA aligns with your financial situation and long-term plans. It's important to make an informed decision to avoid unexpected financial burdens after purchasing the condo.
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