There has been a fair amount of real estate activity recently in the South of Market (SOMA) area of San Francisco. So I just thought I would write something that buyers should pay close attention to when purchasing a condominium.

1. The Condo Plan or Tract Map


This will show you exactly what you own and what is a common area. This should clarify what you are liable for and what you have to pay the Home Owner’s Association (HOA) to maintain.

2. Covenants, Conditions and Restrictions (CC&Rs)


Make sure you have read through them and are comfortable accepting them before you close escrow. Once you have closed escrow you are assumed to have accepted all the CC&R terms.

3. Articles of Incorporation of the HOA


These should give you an idea of what the HOA is authorized to do.

4. By-Laws and Operating Rules


You want to understand how the HOA members are elected so you know your rights up front when dealing the HOA.

5. Reserves


Pay special attention to the reserves of the HOA. Given the current economic climate, some HOAs aren’t receiving all their dues and this is causing a short fall in revenues. Some that are not well-funded are increasing their HOA dues or assessments. Also, some banks are not lending to potential buyers in buildings where there are significant HOA delinquencies.

I hope this helps and if you ever need assistance or have a condo related question feel free to contact me.