"If I end up filing the 1120-S they have been filing"

Say what??!? When you examine this, there would be payroll, shareholders, etc. And it is unusual to hold Real Estate in an S Corp, so are you sure this is not a Property Management operation (as separate from the HOA)?

"but I can't find where there would be reason not to"

You have to know if H is right or if S is right. And this real estate ownership issue matters. Are you sure this isn't a Co-op, not an HOA and condos?