Buying a Condo in Dallas: HOA, Reserves, Insurance and Building Due Diligence

The documents to request immediately

• Declaration, bylaws and rules, including any amendments.
• Current operating budget and the prior year's actuals.
• Reserve study, ideally recent, with the funding plan.
• Audited or reviewed financial statements.
• At least twelve months of board meeting minutes.
• Insurance certificate and master policy summary.
• Assessment history and any approved or pending special assessments.
• Resale certificate and any management company disclosures.
• Litigation disclosure, if any exists.

Read the minutes carefully. Boards discuss upcoming projects, insurance changes and disputes there long before those items appear in a budget.

Reserves and the real cost of low dues

A reserve study estimates the remaining life and replacement cost of shared components — roof, elevators, façade, plumbing risers, mechanical systems, parking structure — and models what the association should be setting aside.

Low dues with weak reserves is a deferred cost, not a saving. When a major component fails, the funding comes from a special assessment, a loan repaid through dues, or both.

• Compare the reserve balance with the study's recommended funding level.
• Identify components nearing the end of their service life.
• Ask whether any project has been approved but not yet funded.
• Look at the dues history over several years to see the trend.

Insurance: two policies, one deductible question

The association carries a master policy; you carry an HO-6 unit policy. The critical detail is where the boundary sits — often described as bare walls, single entity or all in — because it determines what your policy must cover.

1. Get the master policy summary and identify the coverage boundary.
2. Ask what the master policy deductible is and how it is allocated to owners after a loss.
3. Confirm loss assessment coverage on your HO-6 policy and whether the limit is adequate.
4. Ask about wind and hail deductible structure specifically.
5. Confirm whether the building carries flood coverage where relevant.

Rules that affect how you can use and later sell the unit

• Rental caps and minimum lease terms, and whether a waitlist applies.
• Short-term rental restrictions.
• Pet limits by number, size or breed policy.
• Renovation rules, approval processes and permitted work hours.
• Move-in and move-out procedures, elevator reservations and deposits.
• Parking assignment, guest parking and EV charging policy.
• Right of first refusal or approval requirements on resale, where applicable.

Financing and project eligibility

Lenders evaluate the project, not just the borrower. Rental concentration, commercial space share, single-owner concentration, delinquency rates, litigation and reserve funding can all affect whether a building is eligible for a particular loan program.

Ask your lender to review the project early. Discovering an eligibility problem late is one of the most common reasons condominium contracts fall apart.

Do not skip the unit inspection

Even in newer buildings, inspect the unit. Interior plumbing, HVAC equipment serving the unit, water heater, electrical panel, windows and doors, appliances and evidence of past water intrusion are all your responsibility once you own it.

Also spend time in the building at different hours. Noise transmission, elevator wait times, parking access and common-area condition are easier to evaluate in person than in documents.