HOA stands for a Homeowners Association. The homeowners association is basically a governing structure for a planned community, such as a development of single-family homes, condominiums, or townhouses and it is run by resident homeowners elected to a board of directors that have been elected to maintain predetermined rules and regulations.
This board will organize regular meetings, establish and maintain budgets, and enforce rules and regulations. Now, if you buy a property with an HOA, you automatically become a member. You agree or accept their rules and regulations and to pay dues, known as HOA fees.
Once you are under contract, the seller shall deliver to you the By-Laws of the community so you can review all their rules and regulations and to make sure you agree with everything established by the HOA before closing. I strongly recommend you take some of your time to read the By-Laws or the Declaration of Covenants, Conditions, and Restrictions (CC&R). In case you decide that their rules and regulations are against your needs or they don’t fit your lifestyle, you do have certain days at the beginning of the signed contract to notify your realtor that you have decided not to move forward. So make sure you read them.
There certainly be pros and cons for this, as you might imagine. The HOA rules and regulations might stop you from doing what you want with your property, they are designed to preserve the neighborhood and help all the homes maintain their property values. If used correctly, the HOA fees also are used to maintain the common areas and keep the entire neighborhood appealing. That’s why it is so important to establish and maintain community budget and reserves. However, if you’d rather have the final word in what you can do or not to your home, then you should avoid communities with HOAs.
According to The Foundation for Community Association Research in their most recent study in 2018 estimates that there were 347,000 community associations nationwide and 26% of the population resided in areas where there were community associations. With the most in Texas, Illinois, California, Florida, and North Carolina and therefore the states with less than 1,000 community associations include Arkansas, North Dakota, Alaska, West Virginia, South Dakota, Mississippi and Wyoming.
Yes. Depending on a community’s maintenance needs and the number of residents, an HOA can periodically raise its fees. Something really important to understand is that if there isn’t enough money in a reserve fund, homeowners might be charged a special assessment in the future. Another thing to ask your realtor at the beginning of the buying process.
If I have to say one advantage and one disadvantage of an HOA would be:
But not all homeowners associations are the same. The fees will vary depending on the amenities offered such as tennis courts, a swimming pool, gym, or a community center. We know that the more features included in the community, the more you’ll pay in HOA fees.
Let me give you some of the different examples of HOA rules so you can decide which one could be pros or cons for you:
This could also be a disadvantage too, right? It depends on how you see it, because if you like order then it could be good for you. The answer is yes. They have a lot of power over how you live in your house and you maintain it. You can be fined or have a lien put on your home for failing to comply with HOA rules and they can also take action against those who don’t pay.
How much their fees are and how often those fees are due, what will cover those fees, if there is a reserve fund for special projects and their rules. I would say for you to weigh the pros and cons of living in an HOA carefully, to determine if it’s right for you. If you are willing to exchanging some control over your home for the reduced responsibilities of maintaining it, and for the benefit of enjoying shared amenities and security, then you know it is a fit for you. Otherwise, communities with HOA are not for everyone.
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