A person looking for a condo in Tucson recently asked this question. They found a property they liked but heard from a neighbor that a special assessment of over $3,000 per unit was charged a few years ago due to roof repairs. This question prompted a need to clarify the relationship between HOA fees and reserve funds, and what to check before purchasing a condo.

First, let's outline what is included in HOA fees. Typical items include maintenance of the building's exterior and common areas, master insurance, shared facilities like pools or gyms, landscaping, trash collection, some utilities depending on the situation, and contributions to the reserve fund. So, what are the actual HOA fees for Tucson condos? Generally, fees for Tucson's condo and townhome communities range from $150 to $350 per month (according to Steadily), and some sources mention that typical condo fees are cited in the range of $300 to $400. Communities with more amenities or older buildings that require significant maintenance often exceed this range.

So, why do special assessments occur? When there isn't enough money in the reserve fund and major repairs like roofing, plumbing, or elevators are needed, the HOA charges residents a special assessment to cover the shortfall. Arizona does not legally require reserve fund contributions like Florida does. Arizona's condominium law only stipulates the authority to prepare a reserve budget but does not mandate contributions; however, it does require that reserve-related information be disclosed to buyers during resale. This makes it crucial for buyers to directly check the HOA's financial statements and reserve studies.

In fact, the special assessment that neighbor experienced was due to a complete roof replacement in a complex built in the 1980s. At that time, the reserve fund was less than one-third of the expected replacement cost, and the remaining amount was divided among the units, resulting in an unexpected large expense. In areas like Tucson where older condo complexes are still being sold, it is especially important to check the age of the building and any recent major repair history. Even newly built complexes often do not have sufficient reserve funds accumulated in the initial years, so being newly constructed does not guarantee peace of mind. Reviewing HOA meeting minutes can help identify any upcoming major repair plans and whether the board has already discussed special assessments.

Next, let's discuss mortgage loans. Lenders consider the HOA's delinquency rate, reserve fund ratio, any lawsuits, and the proportion of commercial space when evaluating condos. If these criteria are not met, the property may be classified as a non-warrantable condo, which could lead to loan denial even if the property itself is appealing. If you are looking at condos near school districts favored by Korean families, refer to ratings from GreatSchools or Niche, but keep in mind that school district boundaries change frequently, so it's advisable to verify the assigned school for the specific address before purchasing. If moving from another state, relying on property tax or insurance standards from your previous residence may overlook important factors, so it's safer to recalculate total monthly expenses including HOA fees.

After hearing about that neighbor's case, this person directly contacted the management company of the property they were interested in and requested the financial statements and board meeting minutes for the past three years. Fortunately, they found out that the complex had already completed the roof replacement several years ago using only the reserve fund and has been gradually replenishing the reserve fund since then. This simple step of directly checking the documents significantly alleviated their vague anxiety about special assessments.

In summary, when looking for a condo, it's important not only to consider the monthly payment but also to check how much is being accumulated in the reserve fund and whether there have been any special assessments in recent years, as this is practical risk management. This article is not investment or legal advice, and it is recommended to consult a real estate professional and, if necessary, a lawyer before making any actual contracts.