Ten Questions Every Tahoe Condo Buyer should ask!
1) What are the Home Owner Association (HOA) Fees? How often are they billed? Current Special Assessments – how much and how often are they billed? Costs are typically a question Tahoe Condo Buyers will ask, but many buyers may not realize there may be more than one HOA involved, and that fees may be billed on an annual, or quarterly basis and not monthly.
In addition asking if there are any current, past, or proposed special assessments that a new owner would be responsible for and how often are they being billed are important questions to ask.
Remember in the Tahoe area there may be more than one HOA fee for condos located in a master planned community, or planned unit development.
For example: a condo located in the Tahoe Donner neighborhood in Truckee, will have two (2) HOA fees. The first HOA fee will be for the individual condominium development. It could be billed monthly, or quarterly. The second HOA fee will be for the Tahoe Donner master planned community, and that fee is billed annually.
Buyer Tip: Making sure the fees quoted on-line (Multiple Listing Service (MLS)) include all fees. For planning purposes, it is important to know all of the pieces of information.
2) What does the HOA fee(s) Cover? Not all HOA fees cover the same items, but here are things to see if they are included: Condo building/common area insurance, exterior maintenance, grounds/common area/parking/road maintenance, snow removal (parking lot, paths, to your doorstep) professional accounting/HOA management, internet, cable, trash, water, sewer/sanitation, electric, gas, just to name a few items).
Some HOA fees are all inclusive, while others are bare bones, so ask what is covered so you can really compare HOA fees for similar complexes. A higher HOA fee that is more inclusive may be a better financial deal compared to a lower one that only covers the basics.
3) Are there usage restrictions? Will this condo development qualify for a loan? Some of our Lake Tahoe and Truckee condo developments do have occupancy (owner use) restrictions even though the condo is not fractional ownership and is 100% owned by owner.
In addition to occupancy restrictions, that will impact the ability of a condo development to qualify for conventional financing, there are other factors that can also impact a condo unit and its ability to qualify for conventional loans. Some developments are limited to cash buyers in our area, so if you need a loan to make your purchase be sure to ask this question!
4) Does the HOA fee cover doors, windows, and decks? In our area most HOA’s do not cover the doors into your unit, windows, or the top of the exterior deck surface, or deck railings. Some do, but most don’t and those expenses for upgrading, or replacing fall back to the unit owner, so when in doubt ask who pays for what – you, the unit owner, or the HOA.
5) Is there a HOA Transfer and Document Prep Fee? Many Tahoe HOA groups have a private transfer fees that are charged when ownership changes hands. The HOA transfer fee may be in addition to HOA doc prep fees (Davis-Stirling Act CA Civil Code 4000-6150 on HOA’s and their disclosure requirements), so be sure to ask if there is a HOA Transfer Fee.
As an FYI if the condominium development in located in a master planned community, there may be more than one HOA and there may be multiple HOA transfer fees, along with multiple HOA disclosures.
In the California Association of REALTORS (CAR) real estate contract that we use here in the North Lake Tahoe –Truckee area, we have specific HOA documents that addressed all of the disclosures requirements under the act so that buyers and sellers know what information should be provided.
6) Is there a Private Transfer Fee? In addition to the HOA Transfer Fees, in some of the newer developments in the Lake Tahoe – Truckee area there can be a Private Transfer Fee that is a percentage (%) fee of the final sales price. Not all developments have this additional fee, so ask!
7) Is the condominium or townhouse development completely built out? Some condo developments in the North Lake Tahoe – Truckee area were not completely built out when they were originally started. What that means to a Tahoe Condo buyer is that at a later date those uncompleted units could be built, which means the value of your unit could be impacted by the new construction units built and you could be impacted by construction noise, debris, and the number of owners using common area facilities could increase.
8) Are pets allowed? If you have a Fido in the family you’ll remember to ask about the HOA pet policy, but if you don’t have a Fido, this may be a question you’ll miss asking. Knowing the Pet Policy is important to know whether you have pets, or not.
9) Are short-term vacation rentals allowed? Are there restrictions on long-term renters? In the North Lake Tahoe – Truckee area you’re more likely to be interested in HOA policy on short-term vacation rentals, but it’s always important to ask about short-term and long-term rental rules and restrictions.
10) Is smoking allowed in complex? Perhaps a politically incorrect issue to bring up, but one that should be asked so you will know the HOA policy on what is, or isn’t allowed.
HOA Financial Review: While this isn’t a question you’ll need to ask, as the Sterling-Davis Act requires financial disclosures by all HOA’s that fall under the act, what you do need to be prepared for is reviewing and understanding the financial documents that are given to you by the HOA.
If you don’t have a strong financial document background, you’ll want to ask a local CPA if they, or a CPA they know of can do a review of the documents provided to you. You’ll want to ask how much, and how quickly can they get the review of their findings back to.
Review of HOA documents is limited during the inspection period, and often you’ll only have a few days to make your complete review, and ask questions. Lining up your CPA team now, or knowing who you will ask to review financial statements and financial audits will be a very important step in your Tahoe condo buying process. The bottom-line, you’ll want to know how well, or how underfunded a group may, before you make your purchase.
There are a lot of questions a Tahoe condo, or home buyer will need to ask before they complete their real estate purchase. The ten questions every Tahoe Condo Buyer should ask are some of the more common ones in our area!
Ten Questions Every Tahoe Condo Buyer should ask, or should plan to ask!
If you have more questions on buying, or selling a condo here in the North Lake Tahoe, or Truckee area, give me a call 530-414-1260. I can help you too!
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Ten Questions Every Tahoe Condo Buyer should ask!