HOA Documents to Read Before You Buy a Condo in Salt Lake County

Read the budget, the reserve information, the rules, the meeting minutes, and the insurance summary before you commit. Those documents tell you what the monthly dues pay for, whether the building is saving for big repairs, and how the community is run. For a buyer in Salt Lake County, they matter as much as the inspection, because you are buying into a shared property, not only a unit.

Charisse Walker is a real estate agent with Chalker Properties Group in Salt Lake and Davis County, Utah, and a licensed mortgage lender. This guide covers what to request, what to look for, and the mistakes that cost buyers money after closing.

This is general information. Your agent can point to your contract's deadline for reviewing documents, and an attorney can explain legal terms.

When you buy a condo or a townhome, you agree to pay dues and follow rules. If the association has little saved and the roof needs replacing, the cost can come back to owners as a special charge. If the rules prohibit what you plan to do, such as renting the unit later or keeping a pet, you find out too late. Documents show those facts before you sign.

They also affect your loan. Lenders look at the project, not only your unit, and some loan types require the community to meet certain standards. The article on FHA and conventional loans touches on this. Ask your lender early whether the project works with your loan.

Your agent will ask the seller or the management company for a package. Ask for all of these:

• Declaration and bylaws. The governing rules of the community.
• Rules and regulations. Daily-life rules such as parking, pets, noise and rentals.
• Current budget. What the association expects to collect and spend this year.
• Financial statements. How the association actually did.
• Reserve study or reserve information. A plan, if one exists, for major repairs.
• Meeting minutes. Often a year or more, to see what is being discussed.
• Insurance summary. What the association insures and what you must insure.
• Current dues and any special charges. Plus any pending or planned charges.

If a document does not exist, that is information too.

Look at where the money goes. Landscaping, snow removal, insurance, water, trash and management are common line items. Then ask what is set aside for the big items, such as roofs, paving, siding and mechanical systems.

An association with little in reserve and old buildings may need to raise dues or charge owners later. That does not make it a dealbreaker, but it should be part of your math. A reserve study that is current and funded gives a clearer picture. If the association has no study, ask why and when one is planned.

Compare the dues with what they cover. A higher monthly amount that includes water and exterior insurance can cost less overall than a low number that leaves you to pay for them separately.

Minutes show what the board talks about: repairs, disputes, rule changes, insurance claims, or plans to raise dues. A pattern is worth noticing. If the same roof leak appears in six months of minutes, ask what was done.

The rules show how you will live. Check the policy on renting, pets, parking, exterior changes, short-term stays and vehicles. A rule you cannot live with is a reason to walk away before you close. Because rules can change by vote, ask how and how often they have been changed.

If you plan to rent the unit later, check for rental caps or restrictions. For investors, the investment property page covers what to ask.

The association usually insures the building or common areas, and you insure what is yours. The line between them depends on the governing documents. Ask your insurance agent to read the summary and tell you what coverage you need for the interior, your belongings, and your liability. Get that answer before you remove contingencies, not after a claim.

Also ask the association whether there have been insurance claims or a change in deductible. A large deductible can come back to owners, and you want to know that in advance.

Yes, and look with the paperwork in your hand. Check the roofs, siding, parking surfaces, fences, stairs, and any shared mechanical areas for signs of age or deferred repair. Look at the drainage and where snow is piled in winter. Ask neighbors, if you meet them, how maintenance requests are handled, and how fast.

Compare what you see with what the documents say. If the reserve plan lists a roof as due soon and the roof looks worn, the two sources agree. If the minutes mention a leak that you can see staining a ceiling, you have your answer. Photographs help you remember, and your inspector can add to your notes.

Your contract sets the time. The review window is often tied to the same due diligence period as your inspection, so start the day you go under contract. If the seller or management company is slow to send the package, tell your agent right away so you can protect your deadline in writing instead of losing days.

Plan to read the package twice. The first pass is for surprises. The second is for questions you can send to the management company. Keep a short list of answers with the date and name of the person who gave them.

• Looking at dues and ignoring what is in the reserve fund.
• Skipping the minutes.
• Assuming the rules cannot change.
• Missing the document review deadline in the contract. Read about the Utah purchase contract to see how deadlines work.
• Not asking the lender if the project fits the loan.
• Comparing a condo to a house without including dues, insurance and special charges.

Here is a typical example, not a specific client. A buyer is interested in a townhome in Salt Lake County. The package arrives and the buyer sees reasonable dues, but the minutes mention a planned roof project and a possible special charge. The reserve information shows the association has saved some, but not enough for the full cost.

The buyer asks the board's manager how the project will be paid for and when. The answer is clear: owners will be charged a set amount over time. The buyer decides whether that fits their budget and either negotiates a credit or walks away. Either way, the choice is informed.

The comparison of townhomes and single-family homes helps with the larger decision.

What is a special assessment? An extra charge to owners, beyond regular dues, for a cost the association cannot cover.

Can dues go up? Yes, depending on the governing documents and the budget.

Who gets the documents? The seller usually provides them, often through the management company.

Can I back out after reading them? That depends on your contract and its dates.

Do I need an attorney? Many buyers ask one to review the documents. It is your choice.

When you find a condo or townhome you like, ask for the full document package the same day you write the offer, and mark your review deadline. Charisse Walker is a real estate agent with Chalker Properties Group in Salt Lake and Davis County, Utah, and a licensed mortgage lender. If you are buying in Salt Lake County and want help reading through a package, you can reach out on the contact page. The Salt Lake City page and the buying a home page are good places to start.