What You Need to Know Before You Say 'Yes' to a Homeowners Association
If you're in the market for a new home you may have noticed that some of the houses you're interested in looking at are part of a homeowners association-or HOA. Before you cross these types of homes off your list it's important to understand exactly what an HOA is.
In its simplest form an HOA is a formal legal entity that has been created to maintain common areas and has the ability to enforce deed restrictions. An HOA can be very strict or have just a few basic rules and guidelines for people to follow.
If you're interested in making an offer on a house within an HOA community it's important to know the rules and what you are required and expected to do as a member. The last thing you want is to move in and find out you're not allowed to run your home business out of your new space or have a certain pet because of a rule you didn't know about.
The most important aspect of an HOA that one needs to be aware of is the amount of money that it will cost you. You should review the assessment fees charged and understand if they are collected monthly quarterly or yearly. The money owed can range from a small amount to thousands of dollars each year depending on what the policy says.
The money collected is often used to build and maintain pools tennis courts golf courses trails parks and numerous other amenities for all homeowners to enjoy. Be sure to ask about the HOA's reserve fund as well. This will give you a good idea as to the possibility of fees being raised.
Be aware that some homeowner associations can dictate the color your house can be painted what your landscaping looks like and even if you can put up decorations at holiday time. Again read all the rules and regulations beforehand.
Some homeowner associations are built as gated communities which offer peace of mind and an added sense of security. Keep in mind that gated communities will keep solicitors out but will also require permission for any guests who happen to stop by.
The HOA will have a board in charge of spending funds making rules and settling disputes. The process works well as long as those serving have the best interests of the homeowners at heart but conflicts can arise. You should ask around to see about any ongoing disputes before becoming a part of an HOA. Major conflicts will typically show up in the minutes of an HOA meeting which should be available to view.
Before you buy a home in an HOA make sure you research how homes have sold in the area over the past few years. If there are a lot of homes for sale and few are actually being sold it may indicate that the neighborhood has a bad reputation and the HOA is not living up to all the advantages it should offer.
For more information regarding HOA's contact our office today.