Subscribe and receive email notifications of new blog posts.
RSS Feed
27
Buying a Chicagoland Condo: HOA Rules and What to Review
Purchasing a condo in the Chicago area is an exciting milestone, and our real estate agents are here to make sure you go in fully informed. Understanding the homeowners' association (HOA) rules before you commit is one of the most important steps in the entire process.
What the HOA documents actually tell you
When you make an offer on a condo, the seller must provide a package of governing documents. These materials are not just formalities — they define how the building operates, what you can and cannot do with your unit, and what you are financially responsible for.
The declaration and bylaws
The declaration and bylaws are the foundation of any HOA. The declaration establishes the legal framework of the association: How the property is divided, what is considered a common area, and what rights unit owners hold. The bylaws govern how the association is run, including how board members are elected and how meetings are conducted. Reading both carefully will tell you whether the building is structured to fit your lifestyle and ownership goals.
Rules and regulations
Separate from the bylaws, the rules and regulations cover day-to-day life inside the building. These documents address:
- Pet policies, including breed or weight restrictions.
- Rental restrictions or owner-occupancy requirements.
- Move-in and move-out procedures and fees.
- Noise, guest, and parking policies.
If any of these restrictions conflict with how you plan to use your home, it is critical to know before closing, not after.
Meeting minutes
Reviewing the last 12 to 24 months of board meeting minutes gives you an unfiltered look at what is actually happening inside the association. You can learn whether there are ongoing disputes among residents, deferred maintenance issues, or pending legal action against the association. This is one of the most revealing documents in the entire HOA package.
The reserve fund study
The reserve fund is the association's savings account for major capital repairs and replacements — think roof, elevators, parking structure, and HVAC systems. A healthy reserve means the association is planning ahead. A depleted or underfunded reserve is a red flag that could lead to a special assessment, which is an unexpected charge passed on to all unit owners to cover a large expense.
Ask for the most recent reserve study and find out what percentage of the recommended reserves are currently funded. Industry guidance generally considers anything below 70 percent to be a concern.
Monthly HOA fees and special assessments
Understanding what your monthly HOA dues cover is essential to calculating your true cost of ownership. Dues typically include:
- Building insurance and exterior maintenance.
- Common area utilities and landscaping.
- Professional management fees.
- Contributions to the reserve fund.
You will also want to ask whether any special assessments have been levied recently or are anticipated. A pattern of special assessments may indicate the association has historically underfunded its reserves or delayed necessary repairs.
Questions to ask before you buy
Before finalizing your decision, make sure you have answers to these key questions:
- Is the building involved in any active litigation?
- What is the current owner-occupancy ratio, and does it affect financing eligibility?
- Are there any pending rule changes or fee increases?
Work with an expert before you sign anything
The HOA review process involves a significant amount of legal and financial information, and it is easy to miss something important without professional guidance. Our team at Baird & Warner is experienced in evaluating condo documents across dozens of Chicagoland neighborhoods and can help you identify potential concerns before they become costly problems. Contact us today to connect with an agent who knows the condo market inside and out.
