April 18, 2019
Homeowners associations get a bad rap, especially in Las Vegas, where many individuals can be subject to mysterious HOA fees and complaint letters. But there are important distinctions between HOAs that accompany stand-alone homes and HOAs associated with condominium structures—mainly, what they each offer.
Uri Vaknin, partner at KRE Capital, which owns the DK Las Vegas portfolio of condos, explains that condo HOAs might provide greater bang for your buck because of on-site amenities, concierge services and more. To understand the benefit of an HOA, he stresses, it’s important to know where your dollars go and how they serve you.
HOA fees are responsible for maintaining amenities in the community, including fitness and business centers and pools. But unlike many HOAs associated with stand-alone homes, condo HOA fees contribute to a higher level of personal service, including concierge benefits and on-site staff. On-site staff is available to accept packages, welcome guests, make dinner reservations and more.
Vaknin stresses the importance of researching the HOA before purchasing a condo. The mark of an adequately funded HOA is that it maintains capital reserves of at least 70 to 75 percent.
Nevada law requires that every high-rise residential building conduct a reserve study, which identifies each component of the structure and the life expectancy of the amenities. It will indicate whether there are large expenses anticipated in the future, while asking about the available reserve funds will tell you if the HOA has enough funding to cover them.
Every HOA is different, and knowing what you’re contributing to the organization is critical. A simple cost analysis will help you understand everything funded by HOA fees. Vaknin says that ultimately, an HOA is designed to enhance your quality of life, so ensuring that it’s doing so is integral.
Increasing fees are a common HOA complaint, but like most other consumer goods and services, costs are bound to increase with time. Vaknin recommends buyers check the HOA fee history to evaluate that past increases were consistent with Consumer Price Indexes (CPI). This helps to ensure that fee increases are reasonable and consistent with inflation.