Owners Associations, HOA, COA, POA, etc.

HOA POA COA Homeowners Assn., Owners Association, Condo Owners Assn., Property Owners Associations

When you invest in real estate within an owners association (e.g., HOA, COA, POA, homeowners association, condo owners association, property owners association), you are also investing in a corporation (e.g., HOA, COA, POA).

Hiring the right lawyer, accountant, engineers, inspectors, contractors, private investigators, and real estate licensee REALTOR® can help you manage the risks when investing in real estate and the owners association.

The HOA’s governing documents, financial health, rules, management, insurance, and ongoing legal issues can directly impact your finances, property rights, and peace of mind.

Buyers operating pre-offer or during SCR310 due diligence, should be considering examining all things HOA as it is important (e.g., covenants, budgets, reserve studies, meeting minutes). You want to avoid expensive surprises such as pending litigation, insurance issues and assessments, imminent special assessments, restrictions on the use of your property, rental issues, common area issues, etc.

Check 3 HOA primary areas:

  1. HOA governance and governing authority.

  2. HOA financial viability.

  3. HOA physical/operational health.

Investigate the rules of the HOA community to understand your rights and limitations as an owner.

  • CC&Rs (Declaration of Covenants, Conditions, and Restrictions): These are the primary laws of the neighborhood. Look closely for strict limitations on renting out the property, pet types/sizes, architectural restructuring, vehicle parking, and exterior holiday decorations.

  • Bylaws: These dictate how the association operates. Review these to understand voting rights, board election procedures, meeting frequencies, and the board’s precise enforcement powers.

  • Rules and Regulations: Boards often maintain separate, fluid rules not found in the CC&Rs. Check for guidelines regarding visitor hours, trash receptacles, and paint colors.

  • Grandfather Clauses: Determine if certain long-term owners are exempt from current restrictions, and whether those exemptions transfer to you upon purchase.

Investigate the financial health and liabilities of the HOA community.

A HOA association with weak financials will look for more money from the individual homeowners. HOA bankruptcies are a potential problem when finding weak HOA financials.

An association should have adequate cash in reserves for long-term capital updates (e.g., roofing, private roads). Some federal GSO’s require certain reserves after the Surfside condo collapse disaster in Florida (e.g., Fannie Mae, Freddie Mac), and problems with HOA reserves can end your purchase money loan.

Learn the delinquency rates of owners who are in arrears on their HOA dues and payments.

Verify the exact amount of HOA dues and payments, determine what services the HOA provides (e.g., landscaping, security), and whether any upcoming fee increases are planned or likely.

Look for any large mandatory cash contributions due or coming due (e.g., special assessments, insurance assessments) or are a likely future vote, especially on infrastructure emergencies.

Have you attorney and private investigators search to determine if the HOA is currently suing or being sued (e.g., by contractors, developers, homeowners) because litigation can stall your sale and signal future issues. If potential liability exceeds the HOA insurance, determine how the owners will be contractually responsible for legal fees and judgments.

Ensure the property that you are buying has no open, unresolved code/HOA violations or outstanding fines that you might be paying post-closing (e.g., certificate of assessment, estoppel certificate).

Do not rely solely on the disclosure forms provided by the seller.

Actively cross-reference public records and your hired professionals’ findings (e.g., a lawyer directed to research the HOA, an accountant directed to research the HOA, private investigators hired to research the HOA). Your hired brokerage and REALTOR® can help you evaluate their work and analyze the deal in light of this information.

Review at least 12 months of meeting minutes (e.g., neighborhood disputes, structural complaints, insurance claims, early discussions about future assessments).

Review the court records.

Walk the community at various times of day and on days of the week. Look for deferred maintenance on common areas (e.g., cracked pools, peeling clubhouse paint). Talk to residents about their experiences with the HOA and ask about any rumors of projects and assessments.

Hire your Local Real Estate Attorney: Retain an attorney to do a deep dive into the CC&Rs and bylaws from an in-state legal perspective. A skilled attorney will identify hidden clauses, check the validity of past amendments, and review the association’s legal liability exposures.

Certified Public Accountant (CPA): Have an accountant analyze the association’s balance sheet, operating budget, and reserve studies. A CPA can spot structural budget deficits and calculate the likelihood of imminent special assessments.

Experienced Real Estate Broker: Partner with an agent and REALTOR® who understands community operations. They can look up historical sales data, pull relevant governing packets via documentation networks, and help you evaluate the community’s financial trends.13

Licensed Property Inspectors / Engineers: If the common area structures appear degraded, a professional inspector can assess structural integrity, helping you anticipate if major infrastructure components will fail ahead of the reserve study’s timeline.

Legal Document Review12

Obtain and read the complete CC&Rs (Declaration of Restrictions)

  • Review the Association Bylaws and Articles of Incorporation.

  • Read the last 12 months of Board Meeting Minutes.

  • Verify the current Rules and Regulations document for separate constraints (pets, rentals, parking).

  • Check for the existence of any restrictive homeowner grandfather clauses.

Financial Assessment

  • Review the association’s operating budget and income statements.

  • Analyze the latest Reserve Study and check the total cash reserves.

  • Verify the current monthly/annual assessment amount and what it includes.

  • Confirm the percentage of owner-occupied units vs. rental units in the community.

  • Check the delinquency rate of dues across the entire association.

  • Review history or plans for special assessments.

Liens, Insurance, & Litigation Check

  • Request a formal Estoppel Certificate / Resale Certificate for the target property.

  • Confirm the specific home is in full compliance with all HOA rules.

  • Check public county and judicial databases for active or past HOA litigation.

  • Review the HOA Master Insurance Policy (Property, General Liability, and D&O coverage).

  • Verify mandated insurance coverage levels required for individual buyers.

Field and Professional Verification

  • Inspect common areas for visible signs of deferred maintenance.

  • Interview 2–3 neighbors regarding board management practices and community issues.

  • Hire a local real estate attorney to review legal documents.

  • Hire a financial professional to audit the association’s budgets.

Posted by: Byron King on 7/16/26 (This information is only accurate as of 7/16/26. You must contact SCR for updates and changes to this information after 7/16/26, as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org or email byron at screaltors.org)

This information is not legal advice. This information is intended only to provide general information and may not be relied upon as specific legal guidance. Legal counsel should always be consulted before acting in reliance on this information.