Special assessments can come without warning. They are different from the monthly maintenance fees. When major repairs are needed, such as for the roof or plumbing, thousands of dollars can be charged per unit at once. If you only look at the maintenance fees when signing a contract, you might miss this important item. If you are considering investing in a condo in West Covina, it makes sense to check this item first.

The median sale price for condos in West Covina is $627,623. The five items to check in order are maintenance fees, reserve funds, the presence of special assessments, litigation history, and loan eligibility. For a two-bedroom unit, the price is around $560,000, while townhomes are about $787,500. When comparing condos and townhomes with the same budget, condos have a lower entry price but require monthly maintenance fees, whereas townhomes often have a higher entry price but simpler maintenance fee structures. Both types are under the management of a homeowners association. The risk of special assessments should also be checked using the same criteria. The median price for all homes in the same area is $849,538, which is a 0.82% decrease from the previous year. Condos still have a relatively low entry price. The significant price gap between single-family homes and condos suggests that first-time buyers and investors may lean towards condos. However, if you only look at the sale price, you may encounter unexpected expenses in maintenance fees later on.

The main reason for special assessments is usually one: a lack of reserve funds. California requires homeowners associations to conduct reserve studies regularly under the Davis-Stirling Act. If reserves are insufficient, costs for major repairs like roofs, plumbing, and exteriors are collected through special assessments. If the percentage of delinquent units exceeds 15% or if litigation is ongoing, there is also a risk of special assessments. Check whether the homeowners association updates the reserve study annually and if the recent fiscal year budget includes a separate line item for reserve contributions. The items to check include: financial statements from the last 2-3 years, the budget, results of the reserve study, any planned or discussed special assessments, and litigation history recorded in the homeowners association meeting minutes. If the property is for rental purposes, also check the rent cap and minimum rental period. Look at the delinquency rate as well. Also, consider the percentage of commercial space. All seven items can be requested in writing from the homeowners association.

If the building has three or more units, you should also check SB326. This pertains to inspections of external structures like balconies and decks. The first inspection must be completed by January 2025, and it will be repeated every nine years. The inspection results must be included in the reserve study. If they are missing, it is legally considered incomplete.

Loan eligibility should also be briefly addressed. If the percentage of delinquent units exceeds 15% or if litigation is ongoing, the property may be classified as non-warrantable. The down payment ranges from 20% to 30%, and interest rates may increase by 0.5 to 2 percentage points. Starting August 3, 2026, Fannie Mae will eliminate streamlined reviews and switch to detailed reviews, considering reserves, budgets, delinquency rates, and litigation.

If you are moving to West Covina from another state, you need to view property taxes differently. California reassesses property taxes based on the purchase price. The annual increase is capped at 2%. This is Proposition 13. The homeowners association regulations under the Davis-Stirling Act are unique to California. Relying solely on HOA experience from other states and passing documents carelessly is not advisable.

West Covina is in the eastern commuting zone of LA and has a Korean community in the San Gabriel Valley, so rental demand is steady. Condos have no yard maintenance, making them less burdensome for long-distance investors. When calculating rental yields, it is realistic to conservatively include not only maintenance fees but also the potential for special assessments. However, a single special assessment can offset several years' worth of rental income. It is safer to check the homeowners association documents first. This article is not investment or legal advice. Consulting a professional before signing a contract is recommended.