A Homeowner’s Association, otherwise known as HOA, manages a community or subdivision of townhouses and condos. Here are some things to consider when buying a property in the jurisdiction of an HOA.
HOA’s Role – In most complexes, the HOA is responsible for maintaining a clean and safe environment. Landscaping, communal gym, pool area, tennis courts, and any other amenities are monitored and preserved by the HOA. They enforce the rules laid out in the agreements and contracts owners are required to acknowledge and sign. The goal of the HOA is to ensure an appealing living environment thereby allowing for higher property values.
Monthly or Annual Dues – The HOA collects a monthly or annual fee from the homeowners and are responsible for allocating the funds to projects in the complex. These fees are used for landscaping costs, restoration projects, and anything that is used by the community as a whole.
Restrictions – Some HOAs implement stringent rules on what homeowners are allowed to do to the physical appearance of their property. Many place restrictions on hanging plants, colorful window blinds, excessive holiday decorations, and exterior paint color. HOAs vary on the rules they create and enforce depending on the community being managed.
Legal Power – In some cases, the HOA has the right to place a lien on your property if you fall behind on paying your HOA dues. Keep this important piece of information in mind if you choose to buy a property located in the jurisdiction of an HOA management system. This is another payment that should be taken into consideration in regards to the costs of owning a home along with potential homeowner’s insurance, property taxes, and mortgage payments. Just like falling behind on any of these other payments, falling behind on HOA dues can have serious repercussions.
HOAs aren’t for everybody. Some view them as too restricting and intrusive on the perks of homeownership while others appreciate not having to worry about some of the tasks associated with owning your own property. Research the HOA and its guidelines before agreeing to their contract. If you’re interested in being a homeowner that has the power to paint your home bright purple, an HOA may not be for you. However, if the idea of having landscape and amenities taken care of for you for a fee is appealing, you might consider looking into these communities with your Realtor.