Questions to ask before you buy into a POA community

Buying into a property owners association means buying a share of somebody else's budget. The house is yours. The road, the pool, the golf course, the security gate and the reserve fund are collective, and a board you did not elect yet can raise what you pay for them.

That is not a warning. Plenty of these communities are well run and worth every dollar. It is an argument for asking, before you sign, the questions that are awkward to ask afterward.

The list is grouped by who can answer. That grouping is the useful part. Asking a realtor about reserve funding wastes everyone's time, and asking the association office what it is really like in February will get you a brochure answer. Print this, take it with you, and write in the margins.

Nothing here is legal advice. Several of these questions are ones a lawyer should answer for you, and they are marked as such by which column they sit in.

Ask in writing where you can. A body that will not put an answer in writing has told you something.

1. 01 What is the assessment right now, and precisely what does it cover?
2. 02 What does it not cover that people assume it does?
3. 03 What has the assessment been in each of the last ten years?
4. 04 When is the budget approved each year, and may I attend that meeting?
5. 05 May I have the last three approved budgets and the most recent reserve study?
6. 06 How much is in reserves, and what percentage funded does that represent?
7. 07 When was the reserve study last done, and by whom?
8. 08 Has a special assessment ever been levied here? For what, and how much per owner?
9. 09 Is a special assessment under discussion now, or contemplated in any planning document?
10. 10 What one-time fees does a buyer pay at closing, who sets them, and when were they last raised?
11. 11 Which amenities cost extra, and what is this year’s rate for each tier?
12. 12 What share of the association’s revenue comes from somewhere other than member assessments?
13. 13 Has any large outside source of revenue ended in the last five years, or given notice?
14. 14 What are the rules on renting my property, short term and long term?
15. 15 What are the rules on altering or extending the house, and how long does approval take in practice?
16. 16 Are there restrictions on vehicles, recreational vehicles, boats or trailers?
17. 17 What happens if an owner falls behind on an assessment, and at what point can a lien be placed?
18. 18 How many properties are in arrears today?
19. 19 How are board members elected, and how many owners voted in the last election?
20. 20 Is membership mandatory, and does it transfer automatically with the deed?
21. 21 What capital projects are planned in the next five years, and how will each be paid for?
22. 22 What insurance does the association carry, and what does it deliberately leave to owners?

Useful answers, from someone paid on completion. Weigh accordingly.

1. 23 What did this specific property sell for the last two times it changed hands?
2. 24 How long has it been listed, and at what prices?
3. 25 How many properties in this community are for sale now, against a year ago?
4. 26 What is the average time on market here?
5. 27 Which closing costs go to the association and which are ordinary transaction costs?
6. 28 Has the association flagged anything about this property?
7. 29 Are you representing me, the seller, or both, and how are you paid?

Nobody in this column earns anything from your decision, which is what makes the column worth the most.

1. 30 What surprised you about the cost after you moved in?
2. 31 What did you end up driving further for than you expected?
3. 32 What is it like here in the worst month of the year?
4. 33 How long did it take you to get a primary care doctor, and a dentist?
5. 34 What do people here do when they stop driving?
6. 35 If you needed help at two in the morning, who would you call?
7. 36 What is the one thing you would tell somebody thinking of moving here?
8. 37 Knowing what you know now, would you buy here again?

Public offices, public answers, usually free. Most buyers never make these calls.

1. 38 What is the property tax rate, and what would the bill be on this address?
2. 39 Are there special districts or additional levies attached to this address?
3. 40 Who provides ambulance service here, and what is the average response time?
4. 41 Are the roads inside the community maintained publicly or by the association?
5. 42 What flood, fire and storm risk is recorded for this address?
6. 43 Is there pending development, rezoning or utility work nearby?
7. 44 Who provides water and sewer, and what have rates done over the last five years?

The only people in this list who work for you.

1. 45 Will you read the governing documents and tell me plainly what the board can do without a member vote?
2. 46 What will homeowner’s insurance cost at this address, and what has it done over three years?
3. 47 What does the association’s insurance not cover that mine would have to?
4. 48 What does the title work show about liens, easements or unresolved claims?
5. 49 If the association raised the assessment by half, would this purchase still work?

If you only get through two, make them these. Ask the association what the assessment has been in each of the last ten years. Ask a neighbor what surprised them about the cost after they moved in.

The first tells you the direction of travel, which no single current figure can. The second tells you what the first one leaves out.