On June 24, 2021, tragedy struck at the Champlain Towers South in Surfside, Florida.
Families and individuals in Surfside, Florida are mourning the tragic loss of many residents of a condo building in Florida that tragically collapsed on the night of June 24. Engineers and real estate experts claim the collapse was due to a collective failure to manage risk and keep building structural repairs up to date.
And while the specific reason of the collapse is still being investigated, there’s a clear lesson buried along with the rubble of this disastrous event. Homeowners are now questioning the sturdiness and structural safety of their own condominiums.
Is your condo structurally safe?
In the aftermath of this tragedy, people are now asking themselves if their own homes are safe to live in. When you pay a homeowner’s association (HOA) fee to keep things in check, you’d assume that includes handling anything that needs repairs, right?
They should. And they should be consistently studying how much to put away and reserving funds in order to accomplish large projects and updates regularly. But it’s also your job to do your due diligence and make sure your fees are getting used properly.
Why would low homeowner’s association (HOA) fees be a red flag?
While homeowners typically view lower HOA fees as a great thing, it’s important to remember that the fees exist for a reason. They cover important costs to plan for and counter expensive deterioration, like structural repairs and improvements to the buildings. Low fees could indicate that funds are getting allocated for important issues like structural or safety inspections and repairs.
Here are 4 tips for homeowners on how to check for red flags in their HOA:
- Ask to look at the HOA documents, and don’t let the massive size of the binder intimidate you. It’s critical to go through them with a fine-tooth comb and review the covenants, conditions, restrictions, bylaws, and rules and regulations.
- Check if the reserve fund has enough money. Experts say homeowners who typically only look at their homeowner’s association (HOA) fees should also be checking their community’s reserve fund to ensure there is budget for these kinds of updates. Typically, 25-40% of your dues should be going to the reserve fund, which is reserved for the necessary repairs of the buildings.
- Notice how often the fees increase. Considering the economic inflation America is experiencing every year, it should be a red flag if your homeowner assessments isn’t rising every year. Experts say this is a tipoff something is wrong. Check if the raise is consistent – is there a typical percentage increase every year?
- Get an lawyer to review these documents with you. Reviewing any form of lengthy legal document can be overwhelming, but it’s critical you do so to understand what you’re buying and how HOA impacts you, your finances, your safety and your lifestyle.
Getting the help of a real estate lawyer can save you time, money, and headache.
Having to review detailed documents can be a stressful task, especially on top of all the other things on your to-do list when buying a home.
LegalShield provides you access to a real estate lawyer who is familiar with the laws in your state and can go through and break down these documents with you.
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