There are lots of things to love about a residential community that is run by a Homeowner’s Association (“HOA”).
But before you buy a property that is governed by an HOA, you should understand how these associations work.
Here are just 3 things you should consider when deciding whether or not to buy property governed by an HOA.
What often attracts people to HOA communities is the fact that they are so well-maintained. Everything is uniform and nicely kept. Another thing that most people like is the fact that someone else is responsible for maintaining the common areas.
But all this convenience and esthetic comes with a price.
That price is monthly fees and special assessments.
After you purchase property in an HOA you will have to pay monthly fees or dues. These dues vary depending on how many amenities the property has and its location. They also vary according to the management style of the homeowners’ association itself. For example, some HOAs prefer to have a large cash reserve on hand to meet maintenance, legal or management obligations that arise. Others charge lower fees and rely on special assessments – funds levied outside of HOA fees – for repairs and maintenance.
Either way, when you join an HOA, you agree to pay the monthly fee and any special assessments that are imposed. So, for example, if a neighbor’s house needs a new roof and there aren’t enough funds in the HOA’s reserves to pay for it, the association may charge each homeowner a special assessment that can run into the thousands of dollars. If you join an HOA you must be prepared to handle these costs.
The other thing you should consider before buying property governed by an HOA, is that the HOA makes the rules—and there generally are plenty of them.
Every HOA has a code of “covenants, conditions and restrictions” (“CC&Rs”) which govern almost every aspect of community living. In some HOA communities, the CC&Rs limit whether or not you can have pets or grandchildren in your home.
Most CC&Rs have restrictions on a number of things like: parking; whether you can build decks or fences; where your garbage cans go; what color you can paint your house or front door; and whether you can hang clothes out on a clothesline.
It is important to understand that the HOA can change the rules or add new ones. When you buy property in a community governed by an homeowners’ association, you are agreeing to abide by the rules set by the HOA.
This may seem like no problem when you fall in love with a house and community and want to live there. But abiding by the rules quite often leads to conflict when the newness wears off.
So if you are considering buying property in a HOA, review their CC&Rs and think carefully about whether or not you are willing to abide by lots and lots of rules.
Another issue with living in property governed by homeowners’ associations is that there are frequently personality clashes between homeowners and HOA board members who make and enforce the rules.
In some HOAs, the power trips and petty politics can be a real issue. Many times, conflicts between homeowners and board members can end in litigation.
You don’t want to go there.
Litigation is expensive and stressful and, in this case, you will be fighting with your neighbors. Not good. Besides, in many cases, the HOA is in a far stronger position than you are.
So before you buy, do your research. Talk to non-board members who have lived in the HOA for a number of years and find out what it’s like to live there. Talk to the HOA president and ask yourself whether you want this person making decisions for you.
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