Purchasing a HOA property 

Buying a unit part of a HOA has a few specificities.

What is a HOA (PPE) ?

HOA literally means « Home Owner Association » (PPE means « Propriété par étage »).

A classic exemple of a HOA is a building with many appartment units. However, the HOA specificities can also be applied to a land on which houses are built.

Each owners will have to pay the HOA fees (called « les charges de la PPE ») based on the space they occupy, whether it is a large HOA (building with 40 units for exemple) or a very small one (land with 2 houses on it). Generally the HOA is divided in thousands.

If you are the owner of 500/1000 of the HOA, this means that you’ll have to pay 50% of the HOA fees.

What to consider when buying a HOA property ?

By buying a HOA property, you are in a sense agreeing to be part of a « community ».

When buying a unit part of a HOA, it will be necessary to look at the records of the last few board meetings, in order to have a « feel » regarding the owners relationships.

It is also crucial to look at the budget, in order to know what type of renovation work has been done up until now and how much is at the disposal of the HOA. For exemple, if the account balance is at CHF 0.- but the roofing of the building will need work done for an amount of CHF 200k within the next few years, it is very possible that owners would need to to finance it through an exceptional input.

Lastly, you will need to know if the heating and electricity systems are individual. If not, this means that you will pay for those based on the % of your ownership, regardless of how much heating and electricity you and the other co-owners actually use.

Advantages and disadavantages of a HOA :

Advantages

• A property manager will be in charge. He/she will administer the budget, and will ask co-owners to pay forecast installments. If well managed, you shouldnt have to deal with unexpected costs
• The maintenance of the shared parts of the HOA being generally managed by professionals, the maintenance work on your behalf should be very little or even non-existent

Disadvantages

• The HOA decisions are taken based on the majority system, meaning that sometimes you may not agree with it
• You will potentially share community space with people you may not be in the best terms with