# Worked Example — HOA Decoder

## The brief

The Ramirez family is under contract on a townhouse in a 180-unit development ($310/mo HOA). They have five days of due diligence and 90 pages of CC&Rs. They work from home, drive a pickup with a company logo, and plan to rent the place out "someday, maybe." They ask: "anything in here we'll regret?"

## The output

### HOA Decode: Cedar Bend Townhomes — CC&Rs + 2025 budget

**The verdict:** Two provisions collide directly with how you live (the truck, the someday-rental), and the reserve fund's condition suggests a special assessment inside ~3 years. Ask for four documents before your window closes — the answers decide this purchase.

**Restrictions, ranked by YOUR life**

| Provision (§) | What it says | Impact on you |
|---|---|---|
| §8.4 Vehicles | "No commercial vehicles parked in driveways or streets overnight" — includes "vehicles bearing commercial signage" | 🔴 Your logo'd pickup, every night. Enforcement per §12: warning → $50/day. Ask whether garage parking cures it (§8.4 covers "visible" parking) and how it's currently enforced. |
| §10.2 Leasing | Rental cap: "no more than 15% of units leased at any time; waiting list applies; minimum 12-month leases" | 🔴 "Someday rental" needs today's math: ask the current leased count and list length. At the cap, your exit-flexibility is gone for years. |
| §7.1 Architectural | Exterior changes need committee approval, 45-day window, including "satellite equipment placement" | 🟡 Normal, but the 45-day clock matters for any pre-move work. |
| §9.3 Home business | "No business generating client traffic or deliveries beyond customary" | 🟢 Ordinary WFH is fine as written — desk work generates neither. |
| §6.2 Pets | Two pets, 60-lb combined limit | 🟢/🟡 Fine today; a second large dog wouldn't be. |

**The money layer**
- **Fee history:** $310 now; minutes show $265 → $285 → $310 over three years (+8%/yr — outpacing inflation is a yellow flag by itself).
- **Special-assessment exposure:** the 2024 reserve study shows **41% funded** (healthy ≥ 70%) with roofs due in 2–4 years. On 180 units, a $1.1M roofing cycle at 41% reserves ≈ **$3,500–$4,500 per unit** special assessment. §5.6 allows assessments by board vote alone.
- **Lien mechanics (§13):** unpaid assessments lien the home and can foreclose independent of your mortgage — standard, but it makes the reserve question a purchase question.

**The four documents to demand this week** — 1) current reserve study (not the summary), 2) last 12 months of board minutes (search "roof," "assessment," "litigation"), 3) current delinquency rate (>5% = the healthy owners carry the rest), 4) the leased-unit count against the §10.2 cap.

**Questions for the board/manager** — "When is the next reserve study? What's planned for the roofs? Any litigation pending or contemplated? How is §8.4 enforced today — complaint-driven or patrolled?"

*This is a plain-language reading, not legal advice — CC&R enforceability varies by state; confirm anything load-bearing with a real-estate attorney before your diligence window closes.*

## Why it's shaped this way

- **Restrictions are ranked against the buyers' actual life** (truck, someday-rental, WFH) — the same CC&Rs decode differently for different households; that mapping is the skill.
- **The reserve math is computed to a per-unit range** — "41% funded" means nothing to a buyer until it becomes "$3,500–$4,500, board vote alone."
- **The rental cap is treated as an exit-flexibility issue** — the anti-patterns demand surfacing what "someday" costs today.
- **§9.3 is affirmatively cleared** — the WFH fear was checkable; saying "fine as written" is as valuable as any flag.
- **The document list is deadline-shaped** — five days of diligence means the deliverable is *which papers, this week*, not general wariness.
- **Enforcement mechanics (fines/day, liens) are stated with the flag** — a restriction without its enforcement teeth is only half decoded.