The Positives and Negatives of HOAs
Homeowner’s Associations (HOAs) are common in many condo and home communities, especially newer and master-planned communities. Like most things in life, they have their upsides and their downsides. HOAs are not for everyone. For some, they offer some shared resources and moderate assurance that someone is looking after your home value. For others, they can be the bane of your existence. All HOAs are different. They have different rules, different governing structures, and different levels of zealousness. Before you buy a condo or home in a community with an HOA you need the facts. It is important you know all of the positives and negatives of HOAs, so that you know if it is right for you.
What is an HOA?
Simply, homeowner’s associations are organizations in housing or condo communities that make and enforce rules for the community to protect its value. When you purchase or rent a home within the jurisdiction of an HOA, you automatically become a member and are required to pay dues. Some of them are very strict about what is and is not allowed in their community. Some are much more lax. All HOAs are very different. The differences are mainly due to the composition of their board, the restrictions they enforce, and how they enforce them.
Typically, HOAs are run by a board of directors, but sometimes they are called governors. These board members or governors are people from the community and are elected to be a part of this organization. Their main goals are to protect the safety and home values of the community. To achieve these goals create a set of rules that everyone in the community must follow. These rules are usually laid out in a document called a Declaration of Covenants, Conditions, and Restrictions (CC&Rs). The things they govern can be very diverse and vary from homeowner’s association to homeowner’s association. Typically, they can include things such as maintenance requirements, aesthetic requirements (such as the color of a home), or building limitations. Punishment for violating the CC&R can result in warnings, fines, or even liens against your home.
The Positives of HOAs
Some people genuinely enjoy the structure provided by homeowner’s associations and the guarantee that all neighbors will follow some basic rules. Again, all organizations are different from community-to-community, but generally, there are some benefits to buying a home in a community with a homeowner’s association.
Managing Disputes With Neighbors
HOAs give you a third party that can help you solve disputes with your neighbors. Depending on the CC&Rs, there are a lot of potential conflicts in which they can help resolve your issue. If your neighbor makes too much noise or you are having problems with their pets, then they might be able to help. Or, if you have concerns about how many vehicles they have parked in the street or how long they have been there, then you can also turn to the HOA. Some people genuinely do not like dealing with interpersonal conflict. HOAs allow you to avoid this by using the organization as a mediary. Plus, the CC&Rs lay out whether or not an issue you have with your neighbor is something you have to live with or something you are within your rights to try and fix.
Keeping Common Areas Maintained
Good HOAs use the dues paid by its members to perform maintenance on all common areas within the neighborhood. They handle all of the landscaping for parks, entrances, and sidewalks. If something is wrong with playground equipment in the park it can be easily handled by the organization instead of having to go through your city government. They help ensure a standard of uniform beauty throughout your community. This helps make it clear who is responsible for these areas and helps preserve the property values of everyone in the neighborhood.
Communal Resources
Some HOAs use their dues to provide amazing resources available to the entire community. Some communities provide hiking trails and dog runs, so that you can enjoy outdoor activities in your own neighborhood. Others provide pools, so that you do not have to go through the costly process of building your own. It is common for HOAs to also provide parks and playgrounds for kids. There are oftentimes clubhouses that are available for you to use for parties and events. All of these communal resources can go a long way to giving you some extra conveniences and provide places where you can get to know all of your neighbors.
The Negatives of HOAs
Even though there are some clear benefits to buying a home in an area with a homeowner’s association, there are some potential downsides. Being aware of the negative aspects of these organizations is important for you to make an informed decision when you buy a home.
Mandatory Dues
When you purchase a home or a condo in a place governed by a homeowner’s association you have to pay dues. How much you have to pay varies greatly from neighborhood-to-neighborhood. Dues can be as low as $100 per year. They can also be as high as $1000 per month. Either way, membership dues are an extra cost that need to be worked into your budget. There can also be severe consequences if you do not pay on time. Not only can you be assessed late fees, but you can also face lawsuits, liens on your home, or even foreclosure.
They Regulate Your Home
Most CC&Rs set firm standards for what you can and cannot do with your home. In some instances, this can include what color you paint your house. It can also include what type of landscaping you are allowed to have, as well as timelines for maintenance. They can also have restrictions on home additions or renovations. These rules and regulations also pertain to when and where you are allowed to park or how many cars are allowed at any given time. Some communities even have regulations that dictate when you are allowed to put your trash cans by the road for pickup and where you have to store them.
Depending on the HOA, nearly everything that relates to your home, especially its exterior and yard, is regulated by your CC&R. If you are not in absolute compliance with these mandates, then you can face fines or worse. For some, they do not enjoy this level of oversight, especially on a home in which they paid good money to be their own.
Final Thoughts
HOAs are not for everyone. Before you buy a home, make sure you speak with your realtor about whether or not it is governed by a homeowner’s association. Then, ask a bunch of follow ups regarding their specific policies, including dues, fines, and regulations. Ask to see a copy of the CC&Rs, so that you know exactly what you are getting into and whether or not it is for you. It is also a good idea to speak to some of your future neighbors and get their opinions on the HOA.
If you decided that the HOA is a good fit for you, then it is a good idea to also get involved and stay informed. Most homeowner’s associations have newsletters that keep you up to date about policies and changes. They also have the minutes from their meetings available for members. Some meetings are also open to members of the community. Also, you can always try and get on the board, so that you can help shape the policies of your homeowner’s association.
Working with an experienced realtor can help you learn the ins-and-outs of your future homeowner’s association. They can inform you about the nuances of the CC&Rs and help you figure out if it is a good fit for you. If it is not, then they can help refine your home search to look for properties that are not governed by a homeowner’s association. Either way, a good realtor is supposed to help you find the perfect fit for you. If you are thinking of buying a home, contact the team at Streamline Realty. We will help educate you on every step of the home buying process. We will make sure you aren’t surprised by things like homeowner’s associations after you’ve already closed.