What Should You Know About Homeowners Associations?
If you’re thinking about moving, there are a lot of factors to consider aside from the house itself.
Homeowners associations are one example. Living in a community with a homeowners association can have its benefits but also its downsides.
It’s important to be well-aware of the implications of living in a community with a homeowners association before you make an offer on a house.
The Basics: What Is An HOA?
An HOA is a governing body in a community, and you’ll often find they’re present in gated neighborhoods, planned communities, and apartment and condo buildings. An HOA is funded and operated by residents, and there’s a board of directors.
HOAs have meetings, create budgets, and are responsible for enforcing regulations and rules. The rules set by an HOA are legally enforceable.
A well-run HOA can improve property values because they work to make sure the community maintains a certain standard as far as how homes and lawns look. Poorly run HOAs can be expensive and make it difficult to own a home in the neighborhood because of the bureaucracy.
If you’re a member of an HOA, you might pay dues monthly, quarterly, or yearly.
The dues are meant to go toward keeping up common areas like clubhouses, pools, walkways, and lighting.
Fees vary significantly depending on location and the neighborhood or building itself. HOA fees might be $50 a month to thousands of dollars a month.
How Do the Rules of an HOA Work?
HOA rules are referred to as conditions and restrictions, or covenants. If there is an HOA in a community where you’re thinking about buying a home, you need to understand them well.
The majority of HOA rules are going to be related to the exterior of a home.
For example, you may be required to maintain your lawn in a certain way. You may only be able to paint your house in particular colors. In condos and apartments, the rules might be related to things like pet ownership.
If you don’t follow the rules of HOA, initially, you’ll be asked to comply. If you don’t, you may have to pay fines, and then if it gets beyond that point you may face a lawsuit.
Additionally, if you don’t pay HOA fees, the board can put a lien on your home or even require you to foreclose, depending on the state where you live.
What to Find Out About an HOA Before Buying
If you’re looking at a home with an HOA, the following are things to find out or ask your real estate agent to find out for you:
- Ask if you can attend an HOA meeting, or if that’s not possible, request a copy of the most recent minutes. This will give you a feel for the behavior of the board members and whether their top priority is resident well-being.
- Your HOA should be in good financial standing. Otherwise, you may be hit with an unexpected assessment that you have to pay if work needs to be done in the community.
- Are there are a lot of issues between the board and homeowners?
- You’ll have to consider how well the HOA’s rules will fit with your lifestyle and if you’re comfortable with that kind of control being exercised over your home and living environment.
- Go over, in detail, what HOA fees will include.
Finally, along with thinking about how HOA fees and rules will affect you now, you have to think about how it’s going to affect the resell value of a home you buy. There are a lot of buyers who simply don’t want an HOA, and if you do want to sell your home, your pool of buyers may be limited.
Over time, as HOA fees go up, it may put living there out of many people’s price ranges, making it tough to sell your home.
Written by Ashley Sutphin for www.RealtyTimes.com Copyright © 2022 Realty Times All Rights Reserved.