H.O.A.s… what are they all about? Are they just an extra expense for a new homeowner?
The shrinking home inventory has prompted many to turn to new construction, and with budding neighborhoods come budding Home Owners Associations (HOAs). These organizations create and enforce rules(as well as fees and fines) for the homes and properties within its jurisdiction. Curious yet?
Typically HOAs are found in a condominium environment, townhouse or any other type of property within a gated community or planned development, but not excluding ordinary subdivisions. If you purchase a home that falls within the web of an HOA, you’re in. You are obligated to join and therefore pay monthly or annual HOA fees. This is when you step back, right?
Don’t step back too quickly though… HOA fees may seem negative, but if you can identify the benefits you’ll reconsider. The money you pay to your HOA goes towards the upkeep and maintenance of the area you live in. HOA fees are designed to secure the high quality of life for the community’s residents, as well as preserve property values. Both of these things are direct advantages for the homeowner.
HOA fees vary greatly, depending on the type of home you purchase and its location. You’ll find some HOAs which are paid monthly, some yearly, and all at differing costs. The important thing is recognizing exactly what your HOA fees entail, before you buy. The rule is: the more upscale the building and the more amenities it has, the higher the fees will be. We’ll take a look at what exactly you need to know before you buy into an HOA.
Learn the HOA rules so you don’t end up paying a price… Many HOAs will post their rules online, if so, make sure they’re up-to-date. If it’s not as easily accessible, ask your real estate agent or call the HOA yourself. Pay particular attention to fines. Some HOAs can foreclose on your property due to non-payment of accrued fines from violation of any CC&Rs (CC&Rs-covenants, conditions and restrictions, HOA-specific rules all residents must follow). Find out if you can change or add rules and when HOA meetings are held if you wish to attend. If you find the rules too restrictive, you may consider buying elsewhere.
In addition, watch out so you don’t end up buying a home already out of compliance with HOA rules and guidelines. You may find yourself walking into an existing issue and picking up the previous homeowner’s tab. Find out what the rules are ahead of time and what you need to do to make the home comply. This is something your real estate agent can help with.
You Mean, I Have to Recycle?
What are the environmental practices? There are some HOAs that dictate how you treat and care for your lawn. They may enforce the use of fertilizers, pesticides, sprinkler systems or whatever else they deem important to keep your lawn the picture of perfection. Certain things may not be permitted with the HOA. They may limit the size of your garden, forbid compost piles and so on. Whether these things are important to you or not, it’s always wise to read the fine print. And again, HOAs vary. Some are much less restrictive than others.
My Neighbors Painted Their House Fluorescent Red with Racing Stripes!
If you hate being told what to do, living in a community with an HOA might not be a positive experience for you. As you know, one of the major benefits to owning your own home is the liberty that comes along with it-the ability to change it to better fit your personal needs and preferences. An HOA can interfere with this.
And of course, find out about the fees. Consider the following questions as you talk to your agent:
- How large is the HOA’s reserve fund?
- How often do increases occur, and historically how much have they been raised?
- How are HOA fees raised in your community?
- Find out what the fees cover. Does it include payment for things like water, trash pick-up, sewer services and cable TV?
- Ask for a record of special assessments that have been made in the past and ask if any special assessments are planned for the future.
- Has the HOA ever been sued?
Do a Price Check and Get the Stats
Compare dues for the community to the average dues of the surrounding area. If the community has amenities such as a fitness center or pool, you will have to pay for them whether you use them or not. There also may be rules about guests and their use of these amenities.
You can also request a copy of minutes from the last HOA meeting or ask to sit in on one. This can be very telling about the HOA’s policies. You’ll do well to know what current conflicts exist, if any, and how others have been resolved in the past. While we’d like to think that HOAs are devoid of drama and petty politics, be aware it could be an issue in your neighborhood. It can be particularly helpful to talk to some of the community’s current owners-on and off the board. HOAs can be managed by a private company or by building residents who fill the position as volunteers. Either way, you don’t want to end up with something you didn’t bargain for.
In addition to finding out who manages the association, find out what the rental situation is like. Some associations refuse to let owners rent their place for more than 30 to 60 days, if at all.
What are the amenities, parking and pet restrictions? Check out what the hours of use are for pools, spas and recreation areas such as tennis courts to see if they work with your schedule. Some associations have pet restrictions. Find out what those are.
How Much Will HOA Fees Truly Cost?
Consider the financial impact of HOA fees on both your short and long term finances. For example, a condo with high HOA fees may just end up costing you as much as that dream house you thought you couldn’t afford. And don’t forget the possible cost as an independent homeowner. If the restrictions appear greater than the advantages take a second look, but remember that every rule and regulation you don’t have to abide, neither do your neighbors. There may be fees you are willing to pay.
Homeowners’ associations can fill the role of best friend or worst enemy. There are pro’s and con’s involved with any HOA. The bottom line is that it’s more important than ever to be well acquainted with the HOA rules and fees before it’s too late to go back. Your agent will be a great asset to you if you’re deciding to buy a home that is subject to rules.
Source: http://www.startpackingidaho.com/blog/hoas-what-are-they-do-i-have-to-pay-for-them.html
The Hegseth Home Team 