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    chacy's Avatar
    chacy Posts: 4, Reputation: 1
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    #1

    Apr 9, 2013, 01:06 PM
    Buying a free standing condo with no HOA
    I am in escrow on a freestanding condo that has CC&R's but no hoa setup. There are no dues as the HOA has been completely inactive since houses were built in 2008. Lenders are having trouble with these kinds of properties because the way they were filed butdid not have follow through. What are the foreseeable problems with this?
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #2

    Apr 9, 2013, 01:32 PM
    What is the owner occupancy percentage and how many condos total?
    Lenders are very reluctant to write mortgages on condos in ghost towns, and this doesn't look good. As far as I have heard, it's 5% or more.
    What do the conditions of the common areas look like?
    What is the status of the builder or is it all owned by his bank?
    Who is your escrow with?
    If it's freestanding, is the water/sewer connected to town and is it operating and being paid or will each owner be on his own meter? What about snow there? Trash? Common lighting? Have you read the papers and thought about all the major systems?
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    chacy Posts: 4, Reputation: 1
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    #3

    Apr 9, 2013, 03:36 PM
    There are only three freestanding house condos. The other two are lived in. The one I am buying is empty due to divorce. They share a driveway and that is it no lighting or anything else. I don't know if they are owner occupied or rented. The big problem with them just seems to be the lack of follow through on the HOA.they were built in 2008 and are actually very very nice. This is kind of high price for a condo in our area .they have city water and utilities which are all separate for each house.Thanks for taking time to answer.
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    joypulv Posts: 21,591, Reputation: 2941
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    #4

    Apr 9, 2013, 03:44 PM
    Oh - in that case, I would go knock on the doors of the other 2 homes and ask if they are the owners and how maintenance is being arranged. I'd go in the daytime on Sat. or Sun. Some things are best done by bypassing agents and lawyers and lenders.
    Maybe it's not such a big deal. I've known condo owners in small buildings who had co-op arrangements of their own writing. I don't see why you have to use the ones that were written. You all just meet once a month or so and sort it out, making sure to have penalties for those who don't pay, and a careful way to bank with no one able to walk off with funds. Unfortunately the not paying part really only gives the others the option to file a lien, and the non-payer may not care.
    Hopefully it will be a minimal cost each month. Then you don't have to hire a management company, who takes a big fee for nothing.
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    chacy Posts: 4, Reputation: 1
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    #5

    Apr 9, 2013, 10:15 PM
    What if everyone is happy with no hoa? Is that a problem?
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #6

    Apr 10, 2013, 02:00 AM
    Quote Originally Posted by chacy View Post
    What if everyone is happy with no hoa? Is that a problem?

    You do need some sort of co-op to deal with common area concerns.
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    #7

    Apr 10, 2013, 08:15 AM
    Thanks
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
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    #8

    Apr 10, 2013, 08:20 AM
    Hello c:

    What if everyone is happy with no hoa? Is that a problem?
    It sure is! What if they sell and the new guy WANTS an HOA?

    Excon
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #9

    Apr 10, 2013, 09:45 AM
    Quote Originally Posted by excon View Post
    Hello c:

    It sure is! What if they sell and the new guy WANTS an HOA?

    excon
    The new guy isn't going to buy if he wants one. Or he'll be the one to formulate one. Risky if the others don't like it. But it happens all the time, especially when there are only 3 units, like triple deckers in big cities.
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