Everything you need to evaluate before purchasing a condominium, from HOA financial health and reserve funds to unit-specific inspections and resale restrictions.
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HOA Financial Review
Request the HOA's most recent financial statements and annual budget
A healthy HOA keeps at least 70% of its annual assessments in reserves. If the reserve fund is below 30% funded, expect a special assessment within 2-3 years.
Review the operating budget for the current fiscal year
Check if the HOA runs a surplus or deficit
Review the reserve study and its funding percentage
A reserve study estimates the cost of future repairs (roof, elevator, parking lot) and how much the HOA should save annually. Studies older than 5 years are unreliable.
Check for any pending or recent special assessments
Special assessments can range from $1,000 to $50,000+ per unit for major repairs. Ask the HOA for a 5-year history of all special assessments levied against owners.
Compare monthly HOA dues with similar buildings in the area
Average condo HOA fees run $200-$400/month for mid-rise buildings and $500-$1,000+ for high-rises with amenities. Dues that are unusually low may signal deferred maintenance.
Ask about any pending litigation against the HOA
Active lawsuits can block FHA and VA loan approvals. Construction defect suits are common in buildings under 10 years old and can take 3-5 years to resolve.
CC&Rs and Rules Review
Read the CC&Rs (Covenants, Conditions & Restrictions) in full
CC&Rs are typically 30-80 pages. Focus on rental restrictions, pet policies, renovation approval processes, and noise rules. These are legally binding and very hard to change.
Check rental and short-term lease restrictions
Many HOAs cap the percentage of units that can be rented (often 25-50%). Some ban rentals entirely or require minimum lease terms of 6-12 months. This affects resale value and investment potential.
Review pet policies including breed and size restrictions
Common restrictions include 2-pet limits and weight caps of 25-50 pounds. Some buildings ban specific breeds. Violating pet rules can result in $100-$500 fines per incident.
Review renovation and modification approval requirements
Most HOAs require written approval for any changes visible from common areas, flooring changes, or plumbing/electrical work. Approval timelines range from 2-8 weeks.
Unit Inspection
Hire an inspector experienced with condos specifically
Condo inspections cost $250-$400 and focus on the unit interior since the HOA maintains building exteriors. Ask if the inspector will check shared systems like HVAC and water heaters if they serve your unit.
Test all plumbing fixtures for water pressure and drainage
Check windows and sliding doors for seal integrity
Inspect for water damage signs on walls, ceilings, and under sinks
Water intrusion is the #1 condo issue. Look for bubbling paint, stains on ceilings, and musty smells. Remediation costs $1,000-$5,000 depending on the extent of damage.
Test soundproofing between units by visiting at different times of day
Visit the unit on a weekday evening and weekend afternoon to gauge noise levels. Concrete construction transfers less sound than wood-frame. Adding soundproofing after purchase costs $1,500-$5,000 per room.
Check the age and condition of the HVAC system, water heater, and appliances
HVAC systems last 15-20 years; water heaters last 8-12 years. Replacing an in-unit HVAC costs $4,000-$8,000. Factor replacement timelines into your offer price.
Insurance and Financing
Get an HO-6 condo insurance policy (walls-in coverage)
HO-6 policies cost $250-$750/year and cover your unit's interior, personal property, and liability. The HOA's master policy covers the building structure and common areas—not your stuff.
Verify the HOA master policy's coverage limits and deductible
Add loss assessment coverage ($50-$100/year extra) for special assessments from insured events
Verify the building is on the FHA-approved condo list if using FHA financing
FHA requires the entire condo project to be approved, not just your unit. Only about 25% of condo projects have FHA approval. Without it, you need a conventional loan with 5-20% down.
Factor HOA dues into your total monthly housing cost calculation
Lenders include HOA dues in your debt-to-income ratio. A $400/month HOA fee reduces your purchasing power by roughly $70,000-$80,000 compared to a home without HOA fees.
Resale and Long-Term Value
Research the building's historical appreciation rate
Condos typically appreciate 3-5% annually, lagging single-family homes by 1-2% in most markets. Corner units and top floors appreciate faster due to higher demand.
Check the owner-occupancy ratio in the building
Buildings with less than 50% owner-occupancy can lose conventional financing eligibility, making resale harder. Lenders prefer 60%+ owner-occupancy for the best rates.
Review any right-of-first-refusal clauses in the CC&Rs
Some HOAs retain the right to match any offer on your unit when you sell, which can delay closings by 30-60 days and discourage buyers who don't want the uncertainty.
Attend an HOA board meeting before buying
Board meetings reveal the building's real issues—deferred maintenance, neighbor disputes, budget concerns. Meetings are typically monthly and open to prospective buyers upon request.
Frequently Asked Questions
What should I look for in HOA meeting minutes before buying a condo?
Request the last 12-24 months of meeting minutes and look for discussions about upcoming special assessments, deferred maintenance, pending litigation, and insurance coverage gaps. A well-run HOA will have funded reserves equal to at least 70% of their anticipated future repair costs — anything below 30% funded is a red flag that a special assessment is likely. The 2024 Florida condo reform laws now require structural integrity reserves for buildings over 3 stories, which has triggered significant HOA fee increases across the state.
How much are HOA fees typically and what do they cover?
Condo HOA fees average $200-$600 per month nationally, though luxury buildings and older complexes with elevators, pools, and aging infrastructure can exceed $1,000/month. Fees typically cover building insurance (exterior and common areas), water/sewer, trash, landscaping, elevator maintenance, and reserve fund contributions. Your personal condo unit still needs its own HO-6 insurance policy ($200-$400/year) for interior walls, personal property, and liability — the HOA master policy does not cover the inside of your unit.
Can I rent out my condo unit?
Rental policies vary drastically between condo associations — some allow unrestricted rentals, others impose minimum lease terms (6-12 months), and many limit the percentage of units that can be rented at any time (often 20-30%). Some HOAs ban short-term rentals (Airbnb/VRBO) entirely regardless of local laws. These rental restrictions directly affect your resale pool since investors won't buy units with tight rental caps, and FHA financing becomes unavailable when the rental percentage exceeds 50%.
What is a special assessment and how much can it cost?
A special assessment is a one-time charge levied by the HOA to cover major repairs or improvements not funded by regular reserves — examples include roof replacement, elevator modernization, facade repairs, or parking structure waterproofing. Assessments typically range from $2,000-$20,000 per unit but can exceed $50,000-$100,000 for major structural work on older high-rise buildings. Some HOAs offer payment plans over 12-24 months, while others demand the full amount within 30-90 days, so always ask about the HOA's assessment history and reserve funding level before purchasing.