A Home Owners Association (HOA) community can provide living opportunities to any age buyer that might otherwise not be affordable in a single-family home. Or perhaps rather than affordability, it’s the maintenance-free lifestyle. An HOA is a planned community, usually started by a developer who creates a legal set of rules and regulations that residents agree to follow. In return, residents are able to live in a community with amenities and maintenance upkeep that is paid for through association dues. Depending on the HOA, dues could be required monthly, annually, or both. Most HOAs have mandatory membership, meaning that you must become a member and follow HOA rules to purchase property within the community.
An HOA community can be made up of single family homes, condominiums, or townhomes. When a development is completed, the association nominates board members who are usually residents of the community. The board is responsible for the ongoing management of the community, including collection of dues, creating rules, and managing the upkeep of common areas such as pools, clubhouses, and landscaping.
Advantages of Living in an HOA Community
The main advantages of living in an HOA are:
∙ Affordability for amenities such as a club house, swimming pool, walking trails, maintained common areas, and attractive landscaping.
∙ Homes are usually more aesthetically pleasing. Because HOAs typically require the upkeep of a pleasant appearance, the entire community is well-maintained.
∙ They provide exterior maintenance, often including landscaping, mowing, care of amenities, and repairs to exterior residential structures. These services are paid for by the annual or monthly collective fees paid by residents.
∙ You can have a say in the management of your community. Since you are an owner within the association, it’s possible to exert influence on changes or improvements in the way property is managed.
Concerns about Living in an HOA
Living in an HOA is not for everyone because there are rules and regulations that must be followed, even if you do not agree with them. This is why reading over “articles of incorporation, bylaws, and Covenants, Conditions, and Restrictions (CC&Rs)” is so important before you purchase in an HOA. These documents are usually gathered in a community handbook. Never skip the process of looking them over as you might find a rule or regulation that would prevent you from living there. Some examples of restrictions might include:
∙ No yard decorations
∙ Noise-level restrictions
∙ Owning pets
∙ Limited size and weight of pet
∙ Hanging laundry outside
∙ Parked cars or motorcycles in the driveway
∙ Installing a satellite dish
∙ Type of fence you can install
Living in an HOA community comes with responsibilities. If you repeatedly break rules as a resident, the HOA likely has the right to impose you with a fine, force you to comply with the rules, or it may file a lawsuit against you. It can be very hard to win against an HOA board. And the people you are arguing with are your neighbors.
Know What Your HOA Dues Cover vs. Don’t Cover
If you live in a condominium community, your HOA dues should cover basic things such as snow removal of the roads, landscaping, lawn mowing, and exterior repair on things like roofing and siding. However, some HOAs don’t include trash removal, water costs, or the replacement of broken windows under your monthly fee. Read carefully what added expenses you might incur regularly and if something goes wrong. Most HOAs will require you to carry a specific kind of property insurance.
Research How Well the HOA is Managed and the History of Fee Increases
Ensure the HOA of your potential community follows through on its maintenance responsibilities and the enforcement of its own rules. Look around the whole community. Is the landscaping attended to? Does the roofing of condominiums look solid or in need of replacement? Is the paint and siding of all the units in good order? Do people keep their garbage cans tucked away or are they in plain sight? Sometimes you can get information from a few neighbors on whether the HOA does a good job.
Finally, have your agent get information through the HOA’s management company or current owner on how often the HOA fee has risen in the last few years and by how much. There could be a number of reasons for rising fees, such as an increase in maintenance costs or a proactive move to increase reserves for new roofing that will be needed in the next five years. Whatever the case, you want to know the likelihood of increasing fees and factor that into what you are willing to pay for the long term.