When looking for condos in LA, the next number that catches your eye after home prices is the HOA fees.

If the HOA is around $340 or $388 a month, you can accept that, but some condos have shockingly high fees, exceeding $700 or even $1,000 a month.

High-rise condos that offer services like pools, gyms, security, and valet parking can have fees close to $1,200 a month.

However, a first-time condo buyer asked this question.

"I understand the HOA is $400 a month, but can they suddenly ask for thousands later on?"

Yes, they can.

This is called a Special Assessment, which is essentially an additional fee.

Condo HOA fees cover costs like building exterior maintenance, common area cleaning, landscaping, trash collection, and building insurance. An important aspect is the Reserve Fund.

Simply put, it's an emergency fund that the HOA sets aside gradually in case the building needs major repairs later on.

For example, if a 20-year-old condo needs a new roof costing $1 million, but the HOA has only saved $400,000, there will be a shortfall of $600,000.

Ultimately, this amount can be divided among condo owners.

If there are 100 units, that would mean $6,000 per unit.

So, just because the HOA fees are low doesn't mean it's a good thing.

In fact, you should consider, "Why is the HOA so cheap here?"

If they are collecting less money each month and the Reserve Fund is lacking, you might have to pay a large sum later for major repairs.

In LA, the age of buildings varies greatly.

In Koreatown or the Wilshire area, many condos were built in the 1970s and 1980s. In contrast, downtown or West Hollywood has many relatively newer high-rise condos.

Just because a condo is old doesn't mean it has problems.

If a 30- or 40-year-old building has an HOA that consistently saves money and plans for replacing plumbing, roofs, elevators, etc., it can actually be in good shape.

On the other hand, if the exterior looks fine but the HOA account is empty, that's a different story.

What you need to check is the Reserve Study.

In simple terms, it's a report that calculates what repairs the building will need in the future and how much money will be required.

California HOAs are required by law to conduct this study at least every three years and review it annually.

Balconies have also become important.

According to California SB 326, condos with three or more units must regularly inspect wooden structures that extend outside the building, like balconies or decks.

If the inspection reveals that major repairs are needed, what happens?

Ultimately, HOA funds will be used. If the reserves are sufficient, it can be resolved from there, but if not, a Special Assessment may come into play.

This can also be an issue when applying for loans.

Banks don't just look at your credit score to determine if you can repay a loan. When buying a condo, they also consider the financial status of the condo's HOA, including insurance, lawsuits, and delinquency issues.

If there are serious problems, it may be classified as a Non-Warrantable Condo, making it difficult to obtain a standard mortgage or limiting your loan options.

Therefore, when buying a condo in LA, I believe you shouldn't just look at how much the HOA fees are.

A $350 fee isn't necessarily better than a $700 fee.

Before signing a contract, you should review the recent HOA financial statements and Reserve Study, check if any Special Assessments are planned, and see if there are many units that have not paid their fees for a long time.

Buying a condo isn't just about owning the interior of your unit.

You are also buying into the elevator, the roof, the plumbing, and the financial health of the HOA.

So, rather than focusing on the difference of $50 or $100 in HOA fees, it's more important to verify whether the HOA is managing its finances properly.