Article Courtesy of YAHOO NEWS
By Kathleen Peddicord
Published December 9, 2016
After dreaming about living abroad for years, some retirees
can finally afford to buy the perfect house in a beautiful gated community in an
overseas paradise. Perhaps you're ready to sign on the dotted line, hand over
the cash and move in. Not so fast. Your dream home could become your worst
nightmare. By paying attention to these 10 points, you can avoid finding
yourself the less-than-proud owner of a home that is not what you thought it
The condominium regime. Perhaps your dream home is in a
private gated community where visitors are restricted. If so, then it's
probably a legally formed condominium. In Mexico, for example, condominium
communities are allowed to have gates that restrict who comes and goes.
If you like the gate restriction, then make sure you ask to see the legal
paperwork that initially formed your community as a condominium. This is a
publicly registered document, and the administrator or developer should have
a copy available. If not, your community might find the municipality's
director of urban development sending out officials who will require your
gate to remain open to the public.
Look for permits, permissions and paperwork. Have the
developer or administrator show you the legal documentation that was
involved in setting up your community. The paper might be in a foreign
language and could be difficult to understand. However, simply knowing that
your developer or administrator has the paperwork readily available is an
important sign. You want the running of your community to be transparent,
organized and efficient. Having such documents on hand is a good indicator
that this is the case.
Check the balance sheet. Ask to see the latest balance
sheet for the community. What you want to know are the latest figures on
delinquencies by owners and the community and how the accepted budget
compares with actual expenses. A financially distressed community is
See what's in the reserve fund. Ask how much is in the
reserve account. That is important because you want to make sure the
community has enough held in reserve to be able to afford major repairs or
purchases. When the well runs dry or the wireless internet or swimming pool
pump breaks, you want your community to be able to have it fixed
Look for outstanding lawsuits. Check to see if there are
currently any lawsuits involving the developer, administrator or the
community itself. Look not only in the country where the community is
located, but also in the home country of the developer or administrator. If
there are legal actions, you need to find out why the suit was filed and
what the disposition was.
Obviously, suits from owners filing claims involving your community need to
be investigated. You don't want to be the next one at the table. And don't
ignore claims involving the developer or administrator outside your
particular community. They can give you indications of how business is
Have a look at the common areas. Check how the common
areas look. Make sure the roads are in good repair, the pool is not moldy,
the street signs are legible, the landscaping is well tended and the
furnishings have been updated. The entrance to your community, in
particular, is the face to the outside world. The individual homes may look
great, but if the common areas don't, something is amiss. Find out why.
Check out the security plan. Determine whether there are
modern cameras, security patrols and the gate protocol for visitors and
workers. If anybody can get in by just asking, you might as well not have a
gate. Ask to see a written security protocol. Also inquire about crime
statistics for your community. If the local populace sees your community as
easy pickings, theft will be hard to deter. Security requirements differ
among countries, regions and communities. Look for what you believe to be
Analyze the homeowner association dues. Review a
breakdown of fees that you are expected to pay. Ask if you can pay monthly
or if it must be yearly. Determine how convenient it is to make payments,
including whether you can make a bank transfer, pay with your home currency
and pay online. Find out how often fees have been raised, the expectation
for future increases and whether there have been any special assessments.
Some of these are convenience items, but they all give you insight into how
the community is run.
Look into the rules and bylaws. Carefully read the HOA
rules and regulations that you will be legally obligated to follow. Make
sure you agree with them. Changing bylaws can be an arduous task that often
requires unanimous approval by all owners. Don't think that once you become
an owner you'll be able to convince people to change things you don't like.
One particular point to check is whether the community's bylaws restrict or
prohibit rentals. Even if you aren't planning to rent out your place when
you're not using it in the near term, your situation could change and the
time may come when you'd like to be able to make some extra income this way.
Talk to the owners. Question as many owners as possible
about how the community is run. For example, it is typical across Mexico for
condominiums to be managed by an outside administrator who is supervised by
a vigilance committee made up of owners. By and large, your satisfaction
with daily life in your community is going to be heavily influenced by how
well the community is run.
Find out if there is any owner dissatisfaction or unrest with
the vigilance committee, the administrator, the developer or among owners.
Things can get ugly, so make sure your dream community is full of and run by
people who share your core beliefs. You don't want everyone to be the same, but
it's no fun if you disagree on fundamentals. Remember, the policies that affect
your daily life will be determined by the majority of owners and carried out by
the administrator and VC.
Taking the time to address these issues could potentially save you from making a
terrible mistake. Remember that the salesperson and developer want you to buy,
so you aren't likely to get the straight story from them. Do your research, ask
questions and observe. It can be the difference between living your dream and
dreaming of somewhere else.