Homeowner’s Association: Is Buying a Home With an HOA Right For You?
Sometimes, the home of your dreams just happens to be in a neighborhood with a homeowner’s association (HOA). Understanding the HOA’s benefits and issues can help you determine if an HOA is right for you.
Homeowner’s Association: What Is it?
An HOA is created to manage shared space. If it is a condo, this could mean a roof or the common hallways. If it is a housing development, it could mean the clubhouse, pool, or even the roads. The HOA pays for these common spaces by collecting dues from everything within the HOA boundary.
Most HOA’s require that you join if you live within the boundaries. Dues can be monthly, quarterly, or annually.
Homeowner’s Association Dues and Fees
Every HOA creates their own fee structure that takes into account what is covered. In addition to dues, the HOA can charge you with an assessment. An assessment is needed when the dues are not enough to cover a large renovation.
As a member of the HOA, you can know what your yearly dues are going to be. Assessments, on the other hand, are not always known and can be quite expensive.
Rules and Regulations
Homeowner’s association rules are known as covenants, conditions, and restrictions (CC&R). These rules can determine how you make changes to your home, restrictions on landscaping, pets, and even window coverings that face the street.
Be sure to look at the HOA’s rules before buying to be sure that you are happy with the restrictions. You don’t want to buy a home and then realize that you cannot do something you want to do.
Is an HOA Right For You?
The answer is completely individual. That is why you should look into the HOA before making a decision. Here are a few things to do to determine if this HOA works for you:
- Look at the rules. Be sure to understand the penalties associated with breaking the rules.
- Be sure the home you want to buy already complies with the HOA rules.
- Know the fees associated with the homeowner’s association. See how the fees have changed over the past 10 years to help determine how much they increase yearly.
- Look at the reserve fund. This will help you decide how likely it will be that the HOA needs to charge residents an assessment.
- Pay attention to the amenities. You are paying for the upkeep of the common areas. Make sure you are going to use them.
There Are Benefits to an HOA
For the money you spend having an HOA, you do get many benefits. Here are just a few:
- The neighborhood will look great
- Resale values of homes in an HOA are typically higher
- Amenities you cannot afford on your own such as a pool, tennis courts, or weight room
- Gives you a way to handle grievances with neighbors
If you find a home with an HOA, understanding the HOA and following these tips will help you decide if homeowner’s association living is for you. If you have questions about a home with an HOA, feel free to call us.