ST. LOUIS, MO – September 12, 2026 (STL.News) Americans shopping for a condominium, townhouse, or house governed by a homeowners association may want to add another question to the traditional homebuying checklist.
Not simply: Can I afford this house?
But: Can I afford this HOA?
A growing collection of cases around the United States illustrates why that distinction matters.
Homeowners who believed they had secured their long-term housing costs are now facing special assessments reaching tens of thousands of dollars, sharply rising monthly assessments, expensive repairs, rising insurance costs, and, in some cases, allegations of fraud, kickbacks, or financial mismanagement involving the people entrusted with association money.
The problem deserves particular attention because community associations are no longer a small corner of the American housing market.
The Foundation for Community Association Research estimates that approximately 373,000 community associations existed in the United States at the end of 2025 and projects that number could reach approximately 376,000 to 377,000 during 2026.
About 78.1 million Americans live in community associations, representing approximately 35.2% of U.S. housing.
That means HOA financial management has become an issue affecting tens of millions of American households.
Recent cases show just how substantial the financial consequences can become.
California owners face $49,000 assessment
One recent example comes from Torrance, California.
Owners in a 499-unit condominium development were notified of a special assessment exceeding $49,000 per unit, according to ABC7 Los Angeles.
The assessment reportedly includes major projects such as podium reconstruction, plumbing work, and elevator repairs.
One resident told the station that owners were shocked by the assessment.
The situation is particularly instructive for prospective buyers because the underlying repairs involve components that generally do not appear suddenly.
Elevators age.
Plumbing systems deteriorate.
Roofs eventually require replacement.
Concrete and structural components require maintenance.
These are predictable realities of property ownership.
The unpredictable part is often how an association has financially prepared for them.
A building can look attractive, have manicured landscaping, and advertise seemingly reasonable monthly HOA dues while simultaneously carrying millions of dollars in future capital obligations.
That financial condition may be invisible to someone touring a unit for 30 minutes.
Another California community faces $26,000 assessments
Only days earlier, another California HOA controversy made headlines.
Residents of the Villa Moura condominium complex in San Clemente were confronted with an emergency roof assessment exceeding $26,000 per owner.
An 81-year-old resident told ABC7 Los Angeles that the assessment could force her to move from the home she had worked to afford. Residents also questioned how the association imposed the assessment and challenged its actions.
The human consequences of an assessment of that magnitude should not be overlooked.
A homeowner can have an affordable mortgage.
They can have manageable property taxes.
They can have excellent credit.
They can have faithfully paid every HOA assessment for decades.
And they can still suddenly be responsible for another $20,000, $30,000, $50,000, or potentially more because their ownership includes responsibility for common property.
For retirees living on fixed incomes, that can become financially devastating.
Texas owners paid assessments after their homes burned
An extraordinary example is unfolding at Bayfront Towers in Nassau Bay, Texas, outside Houston.
A March 2021 fire destroyed 11 condominiums and damaged another 26.
More than five years later, owners of some destroyed units reportedly still cannot return home.
Yet their association obligations did not disappear.
The Houston Chronicle reported that one displaced owner still pays about $767 per month in association fees.
Another reportedly has paid nearly $50,000 in association fees since the fire.
But monthly dues were only part of the financial burden.
After insurance proceeds and reserve funds proved insufficient for reconstruction, the association imposed three special assessments totaling approximately $38,249 per unit, raising more than $2.8 million.
The association has defended continuing assessments because insurance, maintenance, and other expenses continue even while individual units remain unusable.
Texas law helps explain the exposure.
Under the Texas Uniform Condominium Act, when covered condominium property is damaged, repair costs exceeding available insurance proceeds can become a common expense, and an association board may levy assessments against owners to cover those expenses. Assessments can also constitute personal obligations of owners secured by liens against their units.
The Bayfront Towers situation therefore provides an important warning:
Owning a condominium means owning part of the building’s financial problems, not merely the space inside the walls of the individual unit.
Sometimes the problem is inadequate reserves
Not every enormous special assessment represents corruption or incompetence.
That distinction is essential.
Associations manage aging physical assets, and maintaining those assets has become considerably more expensive.
Roofs, roads, elevators, pools, parking structures, siding, plumbing, electrical systems, and structural components eventually require major repairs or replacement.
Insurance premiums have also become increasingly difficult for some associations.
Construction costs can rise substantially between when a reserve study is conducted and when work begins.
Natural disasters can cause losses that exceed available insurance.
New safety regulations can require repairs that boards previously postponed.
But these realities make competent financial management more important, not less important.
The Foundation for Community Association Research warns that underfunding assessments can lead to deferred maintenance, higher long-term repair costs, special assessments, and reduced property values.
Its research on aging infrastructure identifies deferred maintenance, reserve funding shortfalls, rising insurance costs, and aging building systems as continuing national concerns.
A properly operated association should therefore attempt to anticipate major expenses years before they become emergencies.
That is the purpose of a reserve study.
The reserve fund may be more important than the monthly fee
A reserve study examines major components maintained by an association and estimates when they will require repair or replacement and what those projects may cost.
A properly prepared study should consider items such as:
- roofs;
- pavement and private roads;
- elevators;
- plumbing;
- structural components;
- balconies;
- siding and exterior surfaces;
- pools and recreational facilities;
- mechanical systems;
- garages and parking structures; and
- other major common property.
The study then helps determine how much money the association should accumulate.
For prospective buyers, this creates an important paradox.
A community advertising unusually low HOA fees may initially appear attractive.
But extremely low assessments can sometimes be a warning rather than a bargain.
If the association is collecting $300 per month when long-term expenses require $450 per month, owners have not eliminated the remaining $150 obligation.
They may simply have postponed it.
Eventually the roof still needs replacement.
The elevator still breaks.
The pavement still deteriorates.
The insurance bill still arrives.
If sufficient money has not accumulated, the owners who happen to own property when the bill comes due may be required to make up years of underfunding through a special assessment.
Fannie Mae examines these risks too
These concerns are significant enough that mortgage-market rules require lenders to review association finances.
Fannie Mae’s condominium project standards allow lenders to review documents including association budgets, financial statements, reserve studies, engineering reports, insurance documentation, and information concerning special assessments.
Its current full-review standards require lenders to evaluate projected HOA budgets and replacement reserves. Reserve studies should examine major common-area components, their condition, remaining useful life, expected repair or replacement costs, existing reserves, and recommended funding plans.
That should tell buyers something important.
If sophisticated mortgage institutions believe an HOA’s financial condition can materially affect the risk of a condominium loan, the individual buyer should take that risk seriously.
Fraud and self-dealing are another danger
Underfunding is not the only issue.
Some recent cases involve something far more troubling: alleged criminal misconduct.
In August, Miami-Dade authorities announced the arrests of six people in what investigators described as an alleged $5.8 million scheme targeting condominium and homeowners associations.
Authorities alleged that property-management companies, affiliated vendors and falsified invoices were used to divert association money.
Charges reported in connection with the investigation included racketeering, money laundering, theft and fraud.
Investigators also warned that the losses could ultimately be substantially higher.
The allegations illustrate another vulnerability of community associations.
An HOA may control hundreds of thousands or millions of dollars collected from homeowners.
Board members are frequently volunteers.
Some have substantial financial or construction experience.
Others do not.
Yet those volunteers may be responsible for approving multimillion-dollar contracts, supervising property managers, reviewing financial statements and deciding how owners’ money is spent.
That structure requires strong internal controls.
Another Miami-Dade case involves alleged kickbacks
An even newer case emerged in Miami-Dade this week.
Authorities announced charges against a property manager and contractor associated with Venetian Gardens at Country Club Miami.
According to prosecutors, the property manager allegedly received approximately $185,000 disguised as loans from the owner of a construction company contracted to perform work at the community.
Investigators reportedly found no evidence that the purported loans involved repayment.
Residents had previously been assessed for work involving roofs, windows, and railings while complaining that portions of their property continued deteriorating.
The allegations remain allegations, and defendants are presumed innocent unless proven guilty.
But the case illustrates precisely why HOA boards must independently supervise management companies and contractors rather than simply approving recommendations presented to them.
Boards cannot outsource their responsibility
Hiring a professional management company does not eliminate the need for board oversight.
HOA directors should be asking:
Who owns the company bidding on this project?
Does that vendor have any relationship with the property manager?
Does a board member have a relationship with the contractor?
Were multiple competitive bids obtained?
Were bids independently verified?
Are payments tied to verified construction milestones?
Who confirms that work was actually completed?
Who reconciles association bank accounts?
Can one person approve a contract, authorize an invoice, and release payment?
Are reserve accounts independently reconciled?
Are financial statements audited or independently reviewed?
Does the board receive copies of bank statements directly from the financial institution?
If millions of dollars are being managed, those precautions are not excessive.
They are elementary financial controls.
Florida demonstrates another side of the problem
Florida has become the center of the national condominium-reserve debate following the catastrophic 2021 collapse of Champlain Towers South in Surfside.
The disaster demonstrated the potentially deadly consequences of aging buildings, deferred maintenance, and difficult decisions over expensive structural repairs.
Florida subsequently strengthened condominium inspection and reserve requirements.
Current Florida law requires qualifying residential condominium associations with three or more habitable stories to obtain structural integrity reserve studies at least every 10 years.
The statute covers major components including roofs and structural systems.
Florida law even requires a conspicuous warning when owners are asked about waiving or reducing certain reserve funding:
Waiving reserves may make owners responsible for unanticipated special assessments.
Florida further amended its laws in 2026 to give associations additional mechanisms, under specified circumstances, to finance required reserve and capital expenses through assessments, lines of credit, or loans.
The lesson extends far beyond Florida.
Maintenance does not become cheaper because an HOA postpones collecting money for it.
Postponement can simply transfer the expense to future owners.
Colorado moved toward stronger reserve requirements
Colorado also acted during 2026.
HB26-1099, which became law in April, requires developers of new planned communities or condominiums to obtain a reserve study before transferring control to the owners’ association.
The study must estimate costs of maintaining, repairing, or replacing common property over a 30-year period and must be conducted by an independent qualified professional without specified financial ties to the developer.
That is effectively an acknowledgment by policymakers that the financial condition homeowners inherit matters enormously.
Buyers should conduct financial due diligence
A home inspection is not enough when purchasing property governed by an association.
An inspector may determine that the furnace works, the outlets function, and the plumbing inside the unit appears serviceable.
That does not tell the buyer whether the condominium association needs $8 million for a roof, parking structure, and elevators.
Prospective purchasers should request and carefully examine, where available and legally obtainable:
The current operating budget.
Determine whether annual expenses are consistently exceeding revenue.
Several years of financial statements.
One year may conceal a longer-term trend.
The current reserve balance.
The dollar amount alone is not sufficient. A $2 million reserve can be excellent for one association and dangerously inadequate for another.
The most recent reserve study.
Compare recommended reserve contributions with what the association is actually contributing.
Board meeting minutes.
Review at least the recent history available during the due-diligence period. Look for repeated discussions of roofs, leaks, structural issues, insurance, elevators, plumbing, litigation, engineering studies, and future assessments.
Approved and contemplated special assessments.
Do not ask only whether an assessment has already been approved.
Ask whether one is being discussed.
Engineering and structural reports.
These can reveal major obligations that have not yet reached the assessment stage.
Insurance documentation.
Determine the association’s coverage, deductibles, exclusions, and recent premium history.
Pending litigation.
Litigation can create legal expenses, insurance complications, and potential liabilities.
Delinquency levels.
If many owners don’t pay assessments, the remaining owners can face additional financial pressure.
Major contracts.
For significant upcoming projects, buyers should determine whether contracts have already been awarded and how the work will be financed.
History of assessments and dues increases.
Repeated emergency assessments can indicate chronic underfunding.
The Community Associations Institute itself recommends that resale disclosures include current assessments, approved special assessments, reserve and capital funds, reserve studies, operating budgets, financial statements, insurance information, litigation and outstanding judgments.
Read the minutes, not merely the disclosure form
This may be one of the most important protections available to a buyer.
Suppose a seller truthfully states:
There is currently no approved special assessment.
That doesn’t necessarily mean one isn’t coming.
Board minutes could reveal that engineers recently identified a $4 million roof problem.
Another meeting might discuss obtaining bids.
Another could discuss borrowing money.
Another could mention inadequate reserves.
Technically, there might still be no approved assessment.
But an informed buyer reading those documents could recognize substantial financial exposure.
This is why due diligence should examine the association’s direction, not merely its financial condition on the day the sales contract is signed.
Buyers should investigate the HOA before making an offer
Potential purchasers should consider asking their real estate agent, attorney, or other qualified professional to help answer several questions before the due-diligence period expires:
- How much money does the HOA have in reserves?
- When was the last reserve study completed?
- Is the association following its recommended funding schedule?
- What percentage of recommended reserves is currently funded?
- What major capital projects are expected during the next five to 10 years?
- Are any special assessments being discussed?
- Have engineering reports identified structural or maintenance problems?
- How much has the association’s insurance premium increased?
- What is the master policy deductible?
- How many owners are delinquent?
- Is the association involved in litigation?
- Has the association borrowed money?
- Does it have outstanding loans or lines of credit?
- Have monthly assessments increased substantially?
- Have assessments remained suspiciously unchanged despite inflation and aging infrastructure?
- Are contractors competitively bid?
- Does the property manager have relationships with association vendors?
- Have independent audits or financial reviews identified problems?
- Are there unresolved building-code or safety issues?
- Could the buyer personally absorb a $20,000, $30,000 or $50,000 assessment if one were imposed?
The final question may be uncomfortable.
It is nevertheless increasingly important.
Do not assume insurance will save you
Buyers should also investigate loss-assessment coverage through their personal condominium insurance.
Depending on the policy and circumstances, such coverage can help when an association assesses owners for certain losses associated with an insured event.
But buyers should not assume that insurance will cover an ordinary special assessment.
Reserve deficiencies, deferred maintenance, routine capital improvements and many structural repairs generally are not equivalent to sudden insured casualty losses.
Coverage varies substantially, so owners should obtain specific advice from their licensed insurance professional concerning their policy.
An HOA assessment can become a housing-affordability crisis
The Consumer Financial Protection Bureau recognizes association dues and certain recurring special assessments as mortgage-related obligations for federal ability-to-repay purposes.
The CFPB also reminds consumers that HOA dues generally are separate from mortgage payments and can range from hundreds to more than $1,000 per month.
This creates a significant affordability issue.
A buyer may carefully calculate:
Mortgage: $2,000.
Taxes: $500.
Insurance: $200.
HOA: $400.
Total: $3,100.
But if the association later imposes a $36,000 assessment payable over three years, another $1,000 per month effectively gets added to the housing cost.
The $3,100 home suddenly costs $4,100 per month.
Nothing about the buyer’s mortgage changed.
Nothing about their income changed.
Their association changed the economics of owning the property.
Owners can become financially trapped
Large assessments can create another problem.
A homeowner who cannot afford an assessment might decide to sell.
But the same financial problem motivating that owner to leave can discourage prospective purchasers.
A buyer comparing two $300,000 condominiums may naturally prefer the property without a $40,000 assessment.
The owner can therefore face a painful combination:
They cannot afford to stay.
They cannot easily afford the assessment.
And the assessment can make the property more difficult to sell.
Depending on state law and governing documents, unpaid assessments can also result in collection costs, liens and potentially foreclosure proceedings.
An HOA bill therefore cannot simply be treated as an optional expense.
Cheap HOA dues may be the biggest warning of all
Homebuyers commonly compare associations by monthly fees.
Community A charges $300.
Community B charges $550.
Community A appears cheaper.
But imagine Community A has almost no reserves and needs a $3 million roof replacement.
Community B has accumulated $4 million in reserves over 20 years.
Community B may actually represent the financially safer purchase.
The extra $250 monthly assessment may reflect responsible long-term funding rather than excessive spending.
Low HOA dues are not necessarily evidence of good management.
Sometimes they represent exactly the opposite.
HOA boards should consider this a warning too
This issue is not solely a warning for buyers.
It is also a warning to HOA directors.
Board members are responsible for other people’s money and, depending on applicable law and governing documents, have fiduciary obligations concerning association affairs.
Boards should resist the political temptation to keep assessments artificially low merely because owners dislike increases.
Nobody enjoys paying higher HOA dues.
But a gradual $40 monthly increase can be considerably less destructive than suddenly demanding $30,000 from every household.
Boards should maintain current reserve studies, obtain professional engineering advice when necessary, competitively bid major contracts, disclose conflicts, maintain strong accounting controls, and communicate openly with homeowners.
Large projects should receive additional scrutiny.
A board spending $5 million should not operate with the controls appropriate for a neighborhood bake sale.
Transparency should be the default
Owners should know:
How much money the association has.
Where that money is deposited.
How reserves are invested.
What major repairs are approaching.
Which contractors are bidding.
Why a contractor was selected.
Whether anyone involved has a financial relationship with the contractor.
How much work has been completed.
How invoices are verified.
How much remains to be spent.
And whether the project remains on budget.
Transparency does not guarantee competent management.
But secrecy makes incompetence and misconduct considerably easier to conceal.
This does not mean every HOA is poorly managed
It would be inaccurate to characterize all associations as dysfunctional.
The industry’s own 2026 national survey of 3,000 residents found 63% rated their overall community-association experience as good or very good, another 23% described it as neutral, and 82.6% characterized their relationship with their association board as friendly.
Many associations are financially responsible.
Many board members volunteer substantial amounts of time without compensation.
Many property managers operate professionally.
And legitimate special assessments are sometimes unavoidable.
A catastrophic storm, fire, or unexpected structural defect can overwhelm even reasonably prepared organizations.
The problem is that a buyer cannot safely assume their prospective association is well managed.
They need evidence.
Treat the HOA like a company you are buying
Perhaps the simplest rule for prospective homeowners is this:
Do not buy only the unit. Investigate the association.
When you buy a condominium or HOA property, you’re effectively acquiring a small economic interest in a larger organization.
That organization may own roads.
It may own roofs.
It may maintain elevators.
It may insure multimillion-dollar buildings.
It may employ property managers.
It may hire construction companies.
It may control millions of dollars.
It may have debts.
It may have lawsuits.
And ultimately, the homeowners are its source of money.
If expenses exceed available resources, no mysterious outside corporation absorbs the loss.
The association generally turns to its members.
That means an HOA’s unfunded liabilities can eventually become the homeowner’s liabilities.
The warning for America’s homebuyers
The growing number of headlines about enormous special assessments should change how consumers evaluate association-governed property.
Do not be persuaded simply because the monthly HOA fee appears affordable.
Do not assume an attractive building is financially healthy.
Do not assume that because no special assessment has been formally approved, one is not coming.
Do not assume the association has adequate insurance.
Do not assume the reserve fund is adequate.
Do not assume the board understands complex construction and financial matters.
And certainly do not assume that a property management company eliminates the need for oversight.
Verify it.
Read the financial statements.
Read the reserve study.
Read the engineering reports.
Read the insurance policy.
Read the board minutes.
Investigate the lawsuits.
Examine previous assessments.
Ask what major repairs are approaching.
Determine whether reserves can pay for them.
And if the association refuses to provide information that should reasonably be available during the purchase process, consider the lack of transparency itself a warning sign.
For tens of millions of Americans, buying into an HOA can provide valuable amenities, shared maintenance, and attractive neighborhoods.
But it also creates a financial relationship that can last as long as the property is owned.
A buyer may spend weeks negotiating a few thousand dollars off the purchase price while overlooking an underfunded association that can impose a $40,000 assessment shortly after closing.
In today’s market, that makes HOA due diligence just as important as inspecting the house itself.
The house may belong to the homeowner.
But when the association’s bills come due, part of those bills may belong to the homeowner too.
This article provides general consumer and financial information and is not legal, insurance, investment, or real estate advice. HOA and condominium laws vary substantially by state, and prospective purchasers should consult qualified professionals regarding a particular property or association.
