Buying a new home is challenging and exciting. Kicking tires and exploring new neighborhoods goes with the territory. Chances are growing that a homeowner association will be part of the prospect mix. Most zoning favors HOAs because of land use density and city/county governments like them because things like street, park and lighting maintenance are the HOA's responsibility. Covenant enforcement against trashy property and junk cars is also handled by the HOA.

Home buyers like HOAs because they include amenities like pools, clubhouses, private parks, woods and ponds that would be prohibitively expensive for a lone owner. There is also a tighter control on architectural design and in condominiums, sharing major repairs like roofing and painting usually cut costs in half. Denser housing often means more affordable housing so many first-time home buyers gravitate to condominium homeowner associations.

While there are many advantages to HOA living, there are significant responsibilities that come with the lifestyle. Shared common elements creates an interconnectedness between HOA homeowners that doesn't exist in traditional subdivisions. Since the HOA collects money to maintain the common elements and administrative functions, the financial responsibility for each homeowner can be significant and unpredictable in poorly run HOAs. Poorly managed HOAs fail to plan adequately and levy unfair special assessments to close the gap. Those special assessment can range from several hundred to tens of thousands of dollars.

Architectural control is a common requirement, especially in single-family planned communities where the HOA dictates paint colors, roofing, siding, fences, decks and even the look of landscaping. Folks that like to customize their home may run headlong into the ARC (Architectural Restriction Committee) which puts the kibosh on each and every proposal.

Then there are lifestyle issues like pets and vehicles. Many HOAs strictly control the type and number of pets and where they can and can't roam. Most HOAs have restrictions on parking recreational vehicles, boats, jet skis and commercial vehicles. These issues strike very close to home for some home buyers.

Sorting out the issues becomes more complicated because many real estate agents are uninformed about homeowner associations and their requirements. And even if they are, many HOAs fail to maintain adequate or current records so that the agent and buyer can get better informed. Or if they do have the records, the person that has access to them is on vacation. If the records are actually located, some of them, like the governing documents, take a Kansas City lawyer to interpret. This exercise isn't for the faint of heart.

So what information should an HOA homebuyer be allowed to review and understand to make an informed purchase? Here's a handy checklist:

• Governing documents (also called Declaration and Bylaws or CC&Rs -- Codes, Covenants & Restrictions).

• Rules, Regulations and Resolutions that are not found in the Governing Documents.

• Specific policies relating to Pets, Parking, Collections and Rental Restrictions.

• Financial statements for the last 12 months.

• Annual budget.

• Reserve study showing schedule for major repairs and funding level of reserves.

• Any special assessments coming up soon? If so, how much?

• Current percentage of delinquencies (more than 5 percent means big problems).

• Is the HOA involved in litigation as a defendant or plaintiff? If yes, get details.

• Board and Annual Meeting Minutes for the last 12 months.

• Insurance coverages carried by the HOA.

• Newsletters for the last 12 months.

• List of architectural violations the subject home might have.

• Key contact information.

Exposing prospective buyers to this information is fair, honest and ethical. The HOA needs informed members to run harmoniously.

Virtually none of this information is needed to make an informed buying decision in a stand-alone house. But when buying into an HOA, it is an 800 lb. Buyer Beware. Whether you are a real estate agent or buyer, don't close the deal until you've seen and understood this information.

For more information on Resale Disclosure, see www.Regenesis.net.

Published: September 8, 2004

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Richard Thompson owns Regenesis, a management consulting company that specializes in condominium and homeowner associations. He is a nationally recognized expert on HOA management issues. Regenesis publishes The Regenesis Report, a monthly newsletter for HOA boards, developers and managers. To subscribe, go to Regenesis.net. He can be contacted by email at .