Selling a Condo? Your HOA Fees Might Be About to Matter More

Condos have been a hard sell in California for a while now. Rates are still high, HOA dues have gone up almost every year, and some buildings can’t even get approved for regular financing anymore, so the only people who can buy there are paying cash. Most buyers I talk to aren’t scared off by the price of a condo. It’s the monthly payment that gets them.

That’s why a bill that just passed in Sacramento caught my attention.

It’s called AB 2050, and it would require HOAs to plan for 30 years of repairs on their buildings. If an association doesn’t have enough saved, it would have to start putting more of its budget into reserves each year. And if the budget can’t cover that, owners would get hit with a special assessment to make up the difference.

For some buildings this won’t change much. If your HOA has been saving responsibly, you’re probably fine. But plenty of associations have kept dues low for years by putting off big repairs, and those are the ones that will have to catch up. That usually means higher dues, a one-time assessment, or both.

I get why the state wants this. A surprise bill for a new roof or elevator can wipe out a family’s savings, and it’s better to spread those costs out over time. My concern is what happens to condo owners who want to sell while their HOA is still catching up.

Buyers do the math. They add up the mortgage, taxes, insurance and HOA dues, and if that number keeps climbing, a lot of them will go look at townhomes or small houses instead. The ones who stay interested will want to know if there’s an assessment coming, and they’ll expect you to cover it or knock it off the price. If they can’t get a straight answer about where the fees are headed, many won’t make an offer at all.

So if you own a condo, now is a good time to get familiar with your HOA’s finances. Ask for the latest reserve study and budget. Go to a board meeting or two. Find out if anyone’s talking about raising dues. It’s a lot easier to plan a sale when you already know what a buyer is going to find.

If you’re thinking about selling in the next year or two and want a second set of eyes on your HOA documents, reach out. I’m happy to go through them with you.