From the New York Times: When the dog decides where you live

Here's some Sunday reading from the New York Times -- When the dog decides where you live (title should link)(pic courtesy of NYT too). The article was written from a New York perspective but is certainly not news for us and our house hunters here in L.A.

The Realtor buys a home: why you need to read the Home Owners Association stuff.

If you’ve reading this blog, you know that my husband and I are in escrow on a Studio City townhouse.  We finally got the home owners association documents and they contained a few surprises.

HOA documents are usually voluminous.  They contain the Articles of Incorporation and the CCRS (covenants, conditions and restrictions).  These documents have a lot of boring legalese about how the “corporation” is formed, who is a member (you), how and when the Board can assess a dues increase, etc., etc. All of this is recorded at the county and legally binds the unit owner. The documents should also contain the yearly HOA budget, and income statement, and the minutes for a year’s worth of HOA meetings. If you’re going through this process, you’ll be so over the paperwork by the time you get these that you’ll be tempted to just glance at them.  Don’t.  There are things there that you really need to know.

By the way, it’s also a good idea to speak with the HOA president.  They will be able to give you the back story on everything and even tell you where the bodies are buried.

Back to the documents.  First, yes, you can lightly review the Articles of Incorporation and the parts about who is a member and who can vote, etc.  However, when you get time or want to put yourself to sleep, please read every word.  But then, turn to the rules pages of the CCRs.  This will tell you how many pets you can have, storage rules, how many cars you can park, and if/under what circumstances you can make changes to the exterior of the unit, among other things.  You cannot disregard these, although you may ask the HOA president if specific rules (like pet rules*) are strictly enforced.

Next, please review the budget, income statements, and minutes.  This will tell you a lot about your new neighbors – do they spend money to keep the place up? How much? Do they spend money frivolously?  Are dues projected to go up? What repairs has the building needed and what is anticipated? Have they done any termite remediation?  Are there disagreements at the HOA meetings? If so, about what?  Remember, you and the other owners are all in this together. These HOA folks will be your neighbors (gasp!) and will have an impact on your life and home while you live in your condo/townhouse.  You’ll want to know as much as possible about them and how they view the HOA.

*Digression re pet rules: The vast majority of HOAs (but not all) allow domestic pets but may limit how many pets you can have.  And some HOAs have breed restrictions.

Okay, back to us.  Our new building does spend a lot on upkeep, and it shows.  The building has had a few special assessments for painting and termites.  And it seems as if the other owners are a convivial bunch.  At least we hope so.  All in all, we think we’re pretty lucky about our new place.

Coming soon: what are condo and townhouse HOA dues for and why they are worth it.

House (tale of woe) of the week and news you can use

The house pictured above is a foreclosure in Burbank's Rancho district.  My clients, who are well qualified and have been looking for a home for over a year, made a very smart, clean offer on this cutie. The dollar amount offered was in line with comparable neighborhood sales.  Alas, we learned that another higher offer came in at the same time.  We countered, but ...sigh.  Stay tuned for the outcome.

Now on to the really good news: mortgage interest rates are hovering around 4%, with points, for a conforming loan.  Jumbo loans have rates at low as 4.75%! Nobody is predicting an interest rate rise any time soon, either.

And here are a few tidbits for condo owners.  California has passed a law permitting solar panels to be installed on any condo.  An HOA can issue restrictions, but those restrictions can't be prohibitive.  Also, all condo projects and HOAs must now allow pets! Yes, once again, an HOA can issue restrictions (like a weight restriction, for example) but the restrictions can't be prohibitive.