When considering a new home with a Homeowners Association (HOA), you may ask yourself…how much will it cost me, and in return, what is provided? Here we provide you with some tips on what to generally expect from your HOA.
Before you buy, make sure to consult with your real estate agent to ensure you understand specifically what’s included from the HOA you may become a part of.
about homeowners associations.
Homeowners’ associations, or HOAs, are formal entities created to maintain common areas and can enforce deed restrictions. Condominium, town home developments and many newer single family subdivisions have HOAs, which are typically created when the development is built.
At the time these developments are built, Covenants, Conditions & Restrictions (CC&Rs) are recorded against the property, and HOAs can be established to ensure that such restrictions and terms contained within the CC&Rs are adhered to in order to maintain the quality and value of the properties involved.
- Membership is mandatory for all property owners within the development
- Members may be charged mandatory fees
- HOAs may have the authority to enact and enforce maintenance and design standards, in addition to those established by City ordinance
- HOAs are corporations with formal bylaws, and there is usually a governing board that may hire a property management company to handle maintenance and enforcement issues
common HOA inclusions.
- Establish and collect association dues and fees needed to run the neighborhood operations
- Maintain community landscaping and recreational facilities
- Provide space for events or neighborhood functions
- Provide security
- Arrange for street maintenance
- Enforce deed restrictions including, but not limited to: exterior home maintenance, commercial use of properties and control of trash and blight.
- Additional restrictions that may be enforced by an HOA: parking on street, landscaping approval or types of plants, garage door being open, fence and/or pool restrictions, erection of basketball hoops or tree houses, storage of boats and RVs, number of pets, age requirements of residents. And there can be many more.
tips for prospective home buyers.
Make sure you have complete knowledge regarding your potential HOA, including both dues, restrictions and features.
- Read any CC&Rs recorded against the property and make sure they can live with the conditions and restrictions contained in the document prior to close of escrow.
- Find out what the current dues are. Once you buy the home, you cannot decline to pay the dues. (If you do, you could be evicted and your home could be sold to liquidate the debt.)
- HOA dues can range from $20/month to hundreds of dollars/month, depending on the property and the amenities provided by the community.
- Find out how often the dues have been raised during the history of the HOA. Will you be able to withstand future increases or will you have to move?
- Find out if the HOA has cash reserves? Are there any pending one time assessments?
- Determine if there are term limits for the Board, and if Board members have attended training sessions in efficient HOA management.
- Determine if there is litigation pending involving the HOA.
Courtesy of Brian Olenik @ Corinthian Title
All information contained herein is for informational purposes only and is not intended to offer advice – legal, financial or otherwise – about specific situations or problems. Information is deemed reliable but not guaranteed. Always consult a professional before making decisions about your real estate situation.