Do you live in a community with a HOA or are you considering moving into a neighborhood with one and don’t really understand what it is or what it does? HOA stands for Homeowners Association and they are the rules and guidelines that are intended to protect the rights and property of those people that live in the community. The purpose of a homeowners association is to maintain the property values within a community whether it be a residential neighborhood or a condo or townhome community. While some may quiver at the thought of having to ask the HOA board permission to paint their home and approve the selected color, others enjoy the security of knowing a car enthusiast will not be able to park junkyard cars on blocks next to their home.
Every HOA is different and can cover a wide variety of things; amenities such as pools, gyms, and tennis courts, as well as road maintenance, exterior building maintenance (condos/townhomes) maintenance and landscaping of the grounds including clubhouses, common area insurance, etc. They can also include whether your pets are allowed outdoor on a leash or free roaming. Some, like the last community I lived in, prevent homeowners from having yard sales. Each HOA is different so it’s vital these questions are answered prior to buying your home.
The only way to avoid HOA fees is to buy property in a community that does not have an association or one that has a voluntary association. Once you purchase in a community with a HOA you are locked into those fees established by the community until you decide to sell your home. If you don’t pay the dues, you can be fined by your neighborhood association and a lien can be placed on your home if they remain unpaid. Some HOA determine the exact fee based on the size of the unit, not the price paid, as well as the budget required to both operate the development as well as to fund the capital reserve. My current neighborhood on the other hand has a flat rate that hasn’t changed in 15 years since the community was developed. That is a very good sign of a well-managed HOA.
Before buying a property, we recommend our customers contact the President of the HOA and/or other board members to inquire about the community history, current issues, as well as future plans for the community. Will the dues increase or have they remained the same through the years? When are meetings held? How long does it take to have a request approved for your property? One thing you can be confident about when becoming a resident in a community with an association is that you’ll never have to worry about your property value declining due to neglectful neighbors.
Source: Paul Bannister, Bankrate.com