Homeowners Associations. Many of us have a love-hate relationship with them. Believe it or not, the restrictions, regulations, and conditions are all in favor of the greater good. So what is a homeowners association, and more importantly, what purpose do they serve? For those who are unfamiliar, an HOA is a mandatory association that regulates the overall look and function within a development of condos, townhouses, or free-standing homes.The HOA’s biggest role adheres to common areas such as parks, pools, and clubhouses. All associations have a board, which is made up of elected homeowners within the complex. This board manages maintenance of the community’s common areas, as well as governing the association’s rules.
So why all of the rules?
Formally, an association’s rules are known as the “covenants, conditions, and restrictions” (CC&Rs).These regulations typically apply to exterior factors such as the type of fencing allowed or how the lawn must be kept, but can go as far as mandating what dog breeds you may own or the types of vehicles you are allowed to park in your driveway. While these rules may not be ideal, they are in place to insure a fluid neighborhood aesthetic and etiquette.
But what about the fees?
Yes, there are fees. (Don’t worry I promise it gets better) These fees are typically paid yearly or monthly, and often cover lawn maintenance and plow services, as well as maintenance to the community’s common areas. Aside from the regular maintenance, your dues contribute to the HOA’s reserve fund, which is set aside for major updates or renovations within the community. Dues vary greatly for each association, but the important information you need to know is how fee increases are implemented and how often these increases have happened in the past. You will also want to know how large the reserve fund is and if the HOA foresees any special assessments in the near future. All of these factors can affect the affordability for your family.
The big picture:
Yes, the pesky rules and fees may deter you from wanting to purchase a home within these bounds, but it is important to consider all of the benefits that an HOA adds to your home-ownership. With a homeowners association in place, there are higher standards set for a neighborhood’s overall etiquette. Those unkempt yards and barking dogs will be kept to a minimum. Some associations also offer access to community playgrounds, clubhouses, and pools. I mean what could beat that? And who doesn’t love a low maintenance property? Many association dues cover lawn and road maintenance as well as trash disposal. With all things considered, maybe those dues aren’t so bad after all.
If an HOA seems like a good fit for you, be sure to consider a few things before you make the jump:
- Read through the CC&Rs carefully and thoroughly. It may be beneficial to have an attorney look over these for you as they can be quite lengthy.
- Get a clear understanding of what updates have been done recently and what may be coming up.
- Be sure to research what repercussions may come of a missed payment or a rule violation, just in case.
- Consider the affordability for your family with the possibility of fee increases or special assessments.
- If you are able, sit in on the association’s next meeting so you can get a handle on the overall culture of the HOA.
Homeowner associations truly are not for everyone, but with the right buyer it can be a great fit!
Happy buying!