Your HOA Can Save You Money

Condominiums are a cheap way to buy housing in more popular parts of a city. They are also better for the environment because less material has to be used to build 100 condo units as opposed to building 100 single family homes.

Condo’s are generally smaller, therefore there is less cost when it comes to heating and cooling. Often times, the common area is heated during the colder months and the heat that your neighbor uses gets transmitted to your unit – that’s how my cheap ass has stayed warm for the past few years, minimizing my heater use.

The downside to condos is that they have HOA dues. Even some single family homes and most townhomes have HOA fees due to shared areas or gating.

Though most condo HOA’s are around 0.75-1.5% of the cost of the unit per year, they deter many buyers who often find these numbers to be excessive.

Condos break down less often

I have fixed a lot of things in a single family home and in a condo. Most condos have more solid construction, bordering on commercial grade. It’s less common to find shoddy handyman work (or a poor DIY job) since the HOA often requires someone professional to do the work on a condo.

Then again water leaks are probably one of the biggest issues with condos because pipes wear out, errors can be made during installation, units are adjacent to each other and water will always travel down to the unit below.

There is also much less complexity to a condo. The shared areas are often well maintained by the HOA since repairs cost far more than maintenance.

Repairs are often cheaper in a condo due to more simple and predictable construction. Even the fanciest condo I’ve owned had a fairly simple layout. Ducting, piping and electrical lines are just not as complex or spliced together as I’ve seen in single family homes.

What the HOA is responsible for

This is the best part about an HOA, having them be responsible for the majority of the building. Often, you are only responsible for everything within your walls and they are responsible for everything else.

Most HOA’s will pay for burst drain pipes and leaky water lines as well as pay for any damage they may have caused such as to your drywall or floors.

There is more to it, I recommend reading your Declaration of Covenants, Conditions, and Restrictions (CC&R). The wording will often be lawyer-speak and vague, therefore, don’t leave it at that. Each State has their own restrictions on the HOA and your neighbors likely will have had their own successful negotiations which you can use as precedence.

The HOA has an insurance policy on the entire buildingnand its shared areas. If something breaks down that’s considered ‘shared’ then they need to submit a claim to the insurance company. My building is serviced by AFI.

Uncooperative HOA’s

Interestingly, HOA’s can be incredibly uncooperative. The person in charge is often terse and acts like a gatekeeper. Maybe there is a kickback percentage that I don’t know about – otherwise I’m not sure why they would be since the claims go to the insurance company.

Some HOA’s can be scrupulous and excessive in their behaviors. I’ve interacted with my fair share and for the most part, I would say that if you know the laws and regulations it isn’t hard to deal with them.

What’s important for us HOA consumers to know is that they are financially often responsible for far more than you think.

Ask before paying for anything

If there is a repair that needs to be done in your condo, first ask the HOA and if they are friendly then they will point you in the right direction.

If you get a blanket reply saying “anything within your unit is your responsibility” then you can be certain that you are being blown off. As a blanket statement, that’s almost never correct.

A great recent example was my 2 windows which stopped sliding up and down on their track within a week of each other. I inspected them, it seems to have been the sliding mechanism which fell apart.

I contacted the HOA property manager, Rena, just to see if she had any recommendations on contractors who could properly repair the window. She replied back saying that if it’s the sliding mechanism or the window sash then it would be covered by the HOA – awesome.

Phillip, the building engineer, texted me and came up to inspect the windows. He went to look and see if he had some spare parts which he didn’t so he is going to order them for me and come install them – for free.

Be persistent with HOA

Short of being rude, I would recommend being persistent with the HOA. Much like health insurance claims, the tendency of such entities is to deny the initial request and poo-poo it.

I am fortunate that our property manager is very easy to communicate with and forthright. This has never been the case with my other condos.

Option #1, go above and beyond

You could go all out by sending them a picture of what’s wrong, why you believe the HOA would cover it. Include some screenshots of the relevant CC&R. You could follow this up by mentioning that you spoke with person X on the board or another owner who had a similar situation and they agreed with you.

If the email or document is lengthy and convincing enough, the person on the receiving end won’t be so ready to dismiss it.

Option $2, hire some muscle

Hiring a lawyer or CPA is much more cost-effective thanks to peer-to-peer websites.

I can jump on clarity.fm or JustAnswer and chat with a real estate lawyer and take their recommendation to the HOA. This could cost me as little as $50.

When it comes to repairing something that broke down in the condo, you can also contact your own property insurance company and tell them that you believe your HOA is responsible. They are often very happy to agree with you and can file the claim on your behalf – at no cost.