A home may fit your budget, but homeowners association costs can change the picture. If you buy in a Polk County community with mandatory HOA membership, you may have to pay regular or special assessments. Reviewing the association’s finances, rules and required disclosures before signing can help you understand what ownership may involve.
Here are five areas to check:
1. Annual budget and financial reports
Ask the seller or association what financial information is available. The annual budget can show expected expenses, while financial reports may reveal whether the association has enough income to cover its costs. These records may also point to expenses that could affect future assessments.
2. Reserves and special assessments
Check whether the association has money set aside for major repairs and future maintenance. Low reserves may increase the chance of a special assessment, an extra charge beyond your regular HOA payments.
3. Governing documents and restrictions
Read the declaration, bylaws and current rules before buying. These documents may limit parking, rentals, pets, landscaping or exterior changes. The home itself may meet your needs even if the community’s restrictions do not, so understanding the rules before closing can prevent surprises.
4. Pending expenses and disputes
Ask about proposed special assessments, major repair projects and ongoing lawsuits that could affect the association’s finances. Available meeting notices may also show upcoming decisions involving significant expenses.
An estoppel certificate can identify assessments and other amounts owed to the association for the property.
5. HOA disclosure summary
Florida law requires buyers in communities covered by Chapter 720 to receive an HOA disclosure summary before signing the sales contract. The contract must refer to this disclosure, which explains mandatory membership, assessments and property restrictions.
If you do not receive the disclosure before signing, you may void the contract. You may void it by giving the seller or seller’s agent written notice within three days after receiving the disclosure or before closing, whichever comes first. This right cannot be waived and ends at closing.
Look beyond the purchase price
An HOA can affect both your costs and how you use your property. Reviewing its finances, upcoming charges and rules can help you decide whether the home fits your budget and expectations. If assessments, restrictions or other obligations are unclear, legal guidance can help you understand how they may affect the purchase before closing.