Homeowners Associations – What Is An HOA Anyway??

by

Buying your first home is exciting, but if you’re looking at properties in planned communities, you’ll likely encounter Homeowners Associations (HOAs). Here’s a breakdown of what HOAs are and what you need to know:

  • What is a Homeowners Association (HOA)?

    • An HOA is a private organization that manages and regulates a specific residential community.
    • It’s made up of homeowners within the community and is responsible for maintaining common areas and enforcing community rules.
    • When you buy a home in an HOA community, you automatically become a member and agree to abide by its rules and pay its fees.

  • What Do HOAs Do?

    • Maintain Common Areas: HOAs are responsible for upkeep of shared spaces like parks, pools, clubhouses, and landscaping.
    • Enforce Rules and Regulations: They establish and enforce rules (called Covenants, Conditions, and Restrictions or CC&Rs) that govern things like exterior home maintenance, landscaping, parking, and pet policies.
    • Collect Dues: HOAs collect regular dues from homeowners to cover the costs of maintenance, repairs, and other community expenses.
    • Manage Finances: They create and manage budgets, maintain financial records, and hire contractors for necessary services.
    • Provide Amenities: Many HOAs offer amenities like pools, gyms, playgrounds, and community events.

  • How Much Do HOA Fees Tend to Be?

    • HOA fees vary widely depending on the location, size of the community, and the amenities offered.
    • Fees can range from a few hundred to several hundred dollars per month.
    • It’s crucial to understand the exact HOA fees before buying a home in a community.
    • Ask for the last few years of the HOA financials. This will give you a good idea of how well they are managed.

  • HOA Structure and Governance:

    • HOAs are typically governed by a board of directors elected by the homeowners.
    • The board is responsible for making decisions about the community’s management and finances.
    • Homeowners have the right to attend board meetings and participate in elections.
    • Get a copy of the HOA bylaws, and read them.

  • Things to Consider Before Buying in an HOA Community:

    • Read the CC&Rs: Understand the rules and restrictions before you buy.
    • Ask about special assessments: These are extra fees charged to homeowners for major repairs or projects.
    • Attend an HOA meeting: Get a sense of the community’s atmosphere and how the HOA is managed.
    • Consider your lifestyle: Make sure the HOA’s rules and amenities align with your preferences.
    • Understand the rules for renting your property. Many HOA’s have strict limitations on rentals.

  • Benefits of Living in an HOA Community:

    • Maintained common areas.
    • Amenities and community events.
    • Potential for increased property values.
    • A sense of community.

  • Potential Drawbacks of Living in an HOA Community:

    • HOA fees.
    • Rules and restrictions.
    • Potential for disputes with the HOA.

Key Takeaway: HOAs can offer valuable benefits, but it’s essential to understand their rules and fees before buying a home in an HOA community. Don’t hesitate to ask your real estate agent or mortgage broker for more information.

Call Now Button