Know your association

Before buying a condominium, it pays to get to know your neighbors, especially the home owners association (HOA). First of all, find out how much their building dues are and how many times it has gone up in the past five years or so. Ask to see a copy of their building regulations. Some HOAs are very basic and only enforce restrictions on how many people can live in a unit and other safety and security measures, while some even control what sort of Christmas decorations you can put up.

Ask how large the HOA’s reserve funds (used to pay for maintenance and emergency repairs on the building) are. The larger the reserve, the less a chance of an assessment or one-time payment to chip in for an unexpected expense. The smaller the reserve, the greater the chance you’ll be billed for a building repair in the near future. Some states require periodic updates of reserves to be published to HOA members.