Recently, there has been a common question among those looking at condos and townhomes in Fullerton: why is there a difference in HOA fees when both have them? To put it simply, condos have the HOA responsible for the building's exterior and roof, while townhomes often require individual units to take responsibility for parts of the exterior or roof, leading to different maintenance responsibilities for the HOA.

The median HOA fee for condos in Orange County, where Fullerton is located, is $395 per month. There is significant variation within the area, with some complexes having fees as low as $200 per month, while others exceed $600. Overall, data shows that HOA fees for condos in Orange County range broadly from $200 to $800. If the terminology is unfamiliar, think of it this way: complexes with lower fees typically have a narrower scope of shared areas managed by the HOA or simpler facilities, while those with higher fees have a wider range of responsibilities and amenities managed by the HOA.

HOA fees cover maintenance of the building's exterior and common areas, master insurance, shared facilities like pools and gyms, landscaping, trash collection, and contributions to a reserve fund. Among these, the reserve fund is the most critical. If the reserve fund is insufficient, residents may suddenly face special assessments for major repairs like roofing or plumbing.

One reason more people are considering both condos and townhomes in Fullerton is that townhomes appear to have lower fees. However, upon closer comparison, if a townhome community shares a roof or drainage system, the HOA often takes responsibility for those areas as well, resulting in fees that can be similar to those of condos. In one case comparing an older condo complex near downtown Fullerton with a newly built townhome community, the HOA fees for the townhome were slightly lower, but the reserve fund contribution rate was more stable for the condo. Ultimately, whether it's a condo or a townhome, what matters more is the scope of shared facilities the community is responsible for and how the reserve fund has been managed.

California tends to regulate this aspect through law. Civil Code Section 5550 requires HOAs to conduct a reserve study at least every three years and review it annually. Additionally, buildings with three or more units must have external structures like balconies and decks inspected by a structural expert under SB 326, with inspections repeated every nine years. Rather than feeling reassured by these regulations, it's safer to verify through documentation when the community last conducted a study.

To elaborate further, whether it's a condo or a townhome, the level of HOA responsibility for shared assets ultimately determines the level of fees. If the HOA manages significant structures like roofs, exteriors, and plumbing, a larger portion of the reserve fund should be allocated for safety. Conversely, if the individual unit's responsibilities are broader, the burden on the reserve fund decreases, but individuals must prepare for maintenance costs themselves. When comparing listings in Fullerton, it's advisable to first check where these responsibilities are outlined in the community's governing documents.

Mortgage loans are also an important consideration. Lenders review the HOA's delinquency rates, reserve fund ratios, and any ongoing litigation, and if these do not meet their criteria, the property may be classified as a non-warrantable condo, leading to loan denial. If you're looking in school districts preferred by Korean families, consider ratings from GreatSchools or Niche, but keep in mind that school boundaries change frequently, so verify the assigned school for the specific address before purchasing. If you're coming from out of state, also account for differences in property tax and insurance rates. This article is not investment or legal advice, and it's recommended to consult with professionals before finalizing any contracts.