Homeowners’ Associations – What You Need To Know

Deciding whether or not to buy a home in a community with an established Home Owners Association (HOA) can be a big decision for new homebuyers. Here are some considerations to help you decide if owning a home with an HOA is right for you.

The Benefits: HOAs have one major goal: To preserve the property values of the neighborhoods they govern.

HOAs are responsible for the maintenance of all common areas, such as sidewalks, landscaping and street signs. They do their part to maintain the aesthetic appeal of the neighborhood, while forcing residents to do the same. This helps neighbors as well as individuals because it can be difficult to sell a well maintained home if it’s sitting next to a home that has not been properly maintained.

The best thing about a homeowners’ association is the amenities. Many neighbors with governing bodies have tennis courts, community pools, neighborhood golf courses and fitness clubs. This gives you access to plenty of enjoyable weekend activities without having to join a country club or similar organization.

The HOA also has several other responsibilities including: reviewing and upholding the preservation of the covenants, scheduling maintenance for common areas and coordinating repairs, as well as managing the financial budgets, annual reports and tax returns for the community.

Many HOAs will have one or more committees. Residents are able to bring ideas and comments to their committee members, and should have confidence that their voice is being heard and will have answers in a timely manner.

All of these tasks play an important role in maintaining property value. When deciding on a new home, think about all of the factors that can influence the property value for future resale. Buying a home in a community with an established HOA can help ensure the viability of your investment.

The Drawbacks: If you buy a home in a neighborhood with an HOA, you must follow their rules or suffer the consequences.

Regulations may include what color you can paint your home, the exterior landscaping you can have, the types of vehicles you can park on the street or in your driveway (no RVs, for example), permissible type and height of fences, and restrictions on window coverings for windows facing the street.  If you want to do anything that differs from these rules, you will have to convince the HOA to grant you a variance, which is probably unlikely. Be aware though that no matter where you live, you are likely to be subject to city ordinances and restrictions related to the use of your property.

Generally speaking, homeowners’ associations cause the most problems for people who enjoy expressing their individuality. For example, maybe you’ve always wanted to have a green backyard fence. If you refuse to follow their rules, they will “fix” the problem for you, then send a highly inflated bill to your residence.

Finally, HOAs aren’t free, and they aren’t usually cheap. Dues are required for all residences, and can equal or even exceed property taxes. Upscale neighborhoods with more amenities will be the most expensive, and dues can be raised at any time. In some states, HOAs even have the right to foreclose on homes when dues are delinquent.

Be Prepared:

• Ask to see the contract up front, and look over it carefully with a real estate agent. You should also have access to the minutes of recent board meetings and any other literature that would aid in your decision.
• Find out about the fees. Fees will vary by community.  Make sure to ask the HOA how fee increases are set, how often do they occur and by how much have they historically raised.
• How is the HOA managed? Some HOAs are professionally managed.  In others, residents may simply take turns serving as HOA president or randomly appoint someone, so be prepared to serve in this role whether you want to or not if that is the case with your community’s HOA.

Homeowners’ associations can be your best friend when they prevent your neighbor from painting her house neon pink, but your worst enemy when they expect you to perform expensive maintenance on your home that you don’t think is necessary, or impose rules that you find too restrictive. Before you purchase a property subject to HOA rules and fees, make sure you know exactly what you are getting into.

Marie Dinsmore |  The Dinsmore Real Estate Team

www.dinsmoreteam.com |  www.GA400ShortSales.com