5 Things to Expect When You Purchase a Home in an HOA or Condo Association

Purchasing a house, condominium, or townhome is a significant financial decision. Location, design, and amenities are all important factors to consider before making a commitment, especially if the property is part of a community association.

According to a national and state statistical review conducted by the Community Associations Institute (CAI) in 2016, there are over 342,000 common interest communities in the U.S. with over 69 million residents.

With over 21% of the U.S population living in associations, the information you gather before completing a purchase will help you understand how the association operates and potentially save you from any surprises.

Here are five aspects you should consider when purchasing a home in an association.

1. Documents and information

Every association is administered by a specific set of rules. These governing documents include a declaration, bylaws, rules and regulations. Illinois law permits the buyer to ask the seller to produce these documents before the sale is finalized.

Purchasers can also ask for other disclosures, including:

  • a statement of any liens, including a statement of the account of the unit setting forth the amounts of unpaid assessments and other charges due and owing;
  • a statement of the status and amount of any reserve for replacement fund and any portion of such fund earmarked for any specified project by the board;
  • a statement of any capital expenditures anticipated by the unit owner’s association within the current or succeeding two fiscal years;
  • a statement of the status of any pending suits or judgments in which the unit owner’s association is a party; and
  • a statement setting forth what insurance coverage is provided for all unit owners by the unit owner’s association.

Not only should your purchase agreement require these disclosures, the contract should specify that the transaction is contingent on your receipt, review, and approval of the information. The disclosures should be reviewed with your real estate attorney.

2. Assessments

Association residents pay fees or dues to cover collective maintenance expenses such as landscaping, exercise room upkeep, parking lot lighting, and snow removal.

Assessments are typically collected on a monthly or annual basis and can change based on the needs of the community.

3. Exterior improvements and alterations

Association restrictions need to be considered if you are planning improvements or alterations to your property’s exterior.

There may be community standards addressing decks, sheds, paint colors, aluminum siding style, and fencing height.

4. Pets

Associations can have recorded covenants regarding cats, dogs, birds, fish, and other pets. They can regulate the types, sizes, and number of animals allowed in each unit within the community.

There may also be guidelines involving waste disposal and noise levels.

5. Short-term leasing

Websites such as Airbnb and VRBO.com have provided convenient platforms for owners to rent their units on a short term basis.

While profiting from your unit may be appealing, some associations prohibit short term rentals. Violating this provision can include fines and legal action.


Buying a home in a condo, home, or townhome association automatically makes you a member. While you can benefit from shared expenses and responsibilities, you must also follow the community’s rules.

Being aware of the Association’s rules can provide clarity in ownership so you can enjoy your new home.

If you’re buying or selling a home that’s part of a community association, click here to contact Circle Closings.

Our attorneys can walk you through the real estate closing process, pay attention to the details, and protect your interests during this important transaction.

Leave a Reply

Your email address will not be published. Required fields are marked *