Top Ten Questions to Ask BEFORE you buy
The subject of whether or not to live in an active adult community is a lot like discussing religion or politics: tread carefully until you know the lay of the land. It seems like Baby Boomers either love the idea of the non-stop activities and instant friendships that are possible in an active adult community, or they think the concept is stifling and possibly the worst idea they ever heard of.
To help you come to your own decision on this issue, Topretirements.com has developed a list of ten questions to help with many of the key issues associated with the active adult lifestyle.
1. Who owns the land your home sits on?
Some communities own the land under their members' homes, but in other cases the developer or other investor owns it. In the latter case you can count on steady rent increases and possibly an uncertain future. When all the homes are sold the owner might be less interested in maintaining the amenities. Sometimes there is a plan for the community association to buy the land in a certain number of years or under certain conditions. Of course once the association owns the development, they have to do a good job of managing it.
2. How solid is the financial situation of your developer or association?
There are a host of questions under this topic, but the basic one is this: Can the developer weather a storm, either physically (think mold, hurricane, fire, and flood) or financially (a rise in the percentage of people who don't pay common fees on time, or who default on their mortgages)? It is worth the time examining annual budgets if you can get them; stability is what you want to see. Contingent liabilities are what you don't want to see in the disclosure documents (possible lawsuits or claims).
3. Is there a sinking fund for maintenance?
Most Baby Boomers have learned by now that roofs wear out, just like air conditioning and septic systems. The smart organization has a sinking (reserve) fund that prepares for these eventualities. The less savvy ones are unprepared, so when an unforeseen event occurs (and they always will), the association members will be hit with a big assessment. If the development you are looking at is more than five years old and you see signs of major maintenance being postponed -- look out!
4. What type of assessments have there been?
Look for stability and predictability. Sooner or later, almost every development that is community-owned will have an assessment. But big surprises are a bad sign.
5. What is the reputation of the builder/developer?
In these uncertain times even the most rock-solid developer can run into severe financial problems. If the development or developer is relatively new you need even more active due diligence. In the case of big name developers, you can go online and find out a lot by typing different queries about them into Google. Or you can demand references and ask them your questions. Caution: there will always be unhappy buyers. You have to look for signs where the developers did their best to resolve complaints. Happy customers are a good sign!
6. What is going to happen with adjacent property?
Be cautious in brand new developments. Everything looks great, and then one day you wake up smelling bulldozers across the street. Find out everything you can about future plans in your neighborhood. Deed restrictions can be a wonderful thing.
7. Can the community handle future growth?
Unfortunately some communities are a victim of their own success. Even the "new urban' concept that builds on the ideals of the early 20th century (front porches, pedestrian friendly downtowns, wonderful amenities) can turn bad in the presence of uncontrolled growth. The latter can mean too many students in the school systems, choked highways and streets, rising taxes etc. Caveat: find out everything you can about future planning.
8. What kind of rules will you have to follow?
Having lived in your own suburban castle all these years, you have probably gotten used to just following (or breaking) the rules you and your family set up. But get ready for lots of rules in your new active adult community. For example: Pets or no pets (numbers, weights and breeds), exterior paint colors, lawn maintenance, renting restrictions, improvement/construction rules, guests, parking, noise, dress codes, children, etc. Some communities are rule-crazy, others are not. Try not to buy before finding out that your second dog is not welcome!
9. What is the political atmosphere of the community association?
Most community boards are run by selfless individuals who want to do well for everyone. It is usually a thankless job to be an officer of a community association. Everyone is a critic; very few members ever do anything constructive. Occasionally the people running the show are well-intentioned, but they don't have the experience, discipline, or skills to do a good job at it. Running even the smallest association is a complex task with many important responsibilities -- the people at the helm must be competent. Asking a few questions and reviewing past board minutes could put your mind at ease -- or not! The community association website is a fantastic resource for any condo or Home Owners Association board.
10. What are your new neighbors like?
Presumably many of them are just like you, attracted to the community for the same reasons you are. Talking with some residents will give you a good idea if you will like living with them. Are they approachable and will they make it easy to break in -- or are they more distant? One other thought here: How often do they live there? It can be an unpleasant discovery to move into a community and find that your neighbors are never there (or the reverse!).
We hope these questions will help you make a better search process. We invite you to add your own suggestions and questions to ask in the Forum on active communities. Happy hunting!
By John Brady
John Brady is founder of www.Topretirements.com, the website where Baby Boomers can figure out their best place to retire. The site has objective reviews of over 800 towns and developments, along with practical articles, a Forum, and a free weekly eNewsletter.