Condo buyers don't simply become homeowners once all the papers are signed. They also become part of a homeowners association. Owners of some single-family houses in planned developments also become part of homeowners associations.

Because a homeowners association is essentially a corporation, it's important to check out the rules and the financial health of that enterprise before becoming one of its owners, experts say.

"You're buying into a part of a business, so you need to look at not only the packet they give you, but talk to people in the development. What do they understand are the problems of the development?" said Sam Chuck, a real estate attorney in San Jose.

The association's business is to pay for maintenance and repair of all the mutually owned parts of the community — things like roadways, sidewalks, pools and roofs — and enforce the rules of the association. Owners pay monthly fees to finance those activities.

The "packet" Chuck referred to is typically a stack of documents that should disclose to a potential buyer all the pertinent facts about the operation of the homeowners association, the dos and don'ts of homeowner behavior, and the financial health of the association. The packet is usually provided to buyers once they are in escrow.

Buyers with short "contingency periods" in their purchase agreements should be warned: It can sometimes take several days for an association's property management company to produce the documents.

Among other things, the packet should include copies of the association's articles of incorporation and bylaws, its rules and its "conditions, covenants and restrictions," commonly known as "CC&Rs."

It also should include minutes from a year's worth of association meetings, a copy of the association's budget and a financial statement. Often, association newsletters are included as well.

Chuck said few people bother to read more than a page or two of their CC&Rs, but they should read sections that seem pertinent to their lives.

The documents can specify things like what color door a home can have, what color paint and trim, what kind of fencing can be used, how big a dog an owner can have, how many pets are allowed, even how big a party an owner can throw.

"I've seen CC&Rs that limit what children are allowed to do," Chuck said. Skateboarding might not be allowed, for example.

Robert Rosenberg, an executive with one of the largest property-management companies in northern California, said, "We have people who move into communities and really have no clue they can't play their music at 2 o'clock in the morning, and that's just a basic understanding of the governing documents."

He said sellers' agents should get the documents as soon as they get the listing, so buyers have plenty of time to read them.

"Everyone's always rushed around, and in the end I think the person that is short-changed is the buyer," he said.

Prospective buyers should find out exactly what their association dues will cover. Water? Garbage service? Landscaping?

Buyers also should find out whether dues have gone up over the years. If not, that could be a sign of future trouble, because an aging community will certainly need maintenance, and the association may not have raised enough funds to cover it.

New buyers may be hit with steep increases in dues. "You can't say, 'Hey, I just got here and nobody told me,' " Chuck said.

Buyers also should check out what kind of insurance the association has — for example, does it have an earthquake policy? And what are the deductibles?

Any pending or ongoing litigation also should be disclosed.

Buyers also should be aware of whether the condo is involved in any construction-defect lawsuits because the legal action adds a layer of complexity to a daunting financial transaction.

Knowing about pending litigation, dues and rules is a good start.

But checking out the financial strength of an association is just as important, said Jacquie Berry, president of Community Association Data Source in San Jose.

That can be hard for an average buyer to do, though reviewing meeting minutes and budgets can help.

Condo owners also may be subject to special assessments to pay for repairs that the association's reserve funds can't cover.

Homeowners who don't or can't pay the special assessments may be fined for nonpayment, and can even face foreclosure. So it's important that buyers know what kind of financial shape an association is in before they buy.

Berry said associations whose reserves include at least 70 percent of what's needed to fund anticipated maintenance and repairs are unlikely to have to raise dues steeply in the near future. For associations whose reserves are leaner, homeowners are likely to face significant increases, she said.