Before you buy, know and understand how they operate, your obligations as a member, and what fees are going to come out of your wallet to support management and maintenance. Keep these tips in mind before signing any purchase contract that includes joining an HOA.
The Rules Of The HOA
Covenants of Home Owners Association are set of specific rules and restrictions that all residents of the community or complex must follow. Whether you are considering condominium-type living where members share the amenities in a common area or a individual home in a development, regulations will dictate what you can do or cannot do to personalize your property. There will be rules about exterior paint colors, car parking, fence height, and size of pets allowed.
You will be required to keep all of the rules of the association just as you would city ordinances, so ask your real estate agent to find current copy of the rules for you . More serious considerations beyond parking and pets include the the HOAâ€™s power to impose fines on any violations of their regulations. Some have the right to foreclose on homes for nonpayment of dues, which can run several hundred dollars a month. Your budget will be impacted by HOA fees and dues, so include these as part of your monthly mortgage to see if you can afford living in the development.
If the home you are buying has existing problems or that you must fix in order to comply with the Home Owners Association, this will be another expense to pay for.
Part of the visual appeal of developments are manicured weed-free lawns, colorful flower beds, and pest-free yards. If you prefer composting instead of chemical fertilizers or natural, native plant landscaping instead of HOA chosen nursery stock and regulated mulches, then find a home where you are free to use solar panels or plant large vegetable gardens. The HOA may ban many environmental-friendly practices such as these.
Fees And More Fees
Make sure you know what the monthly dues cover and what fees are your responsibility. Is the trash collection service your bill or the HOAâ€™s? How many special assessments are planned in the future and what kinds of dues have been added in the past five years? The smaller the community, the larger percent each of the members have to pay for maintenance and upkeep, so bear that in mind. You will be required to pay for recreational facilities whether you plan to use them or not. If you have guests, there will be rules for them as well.
Know Everything In Minutes
Ask if you can look over a copy of the last HOA meetingâ€™s minutes. Current conflicts or resolved conflicts will be found here if they exist. Politics abound in any community government and you need to be prepared to deal with powerful a management. Some developments are professionally handled, but some are watched over by private residents who volunteer to make decisions that affect you and your home. Make it a point to meet with board members or the management company to discuss your role as a member.
Management Too Much Or Too Little
When the HOAâ€™s designated manager has little interest in the maintenance of the development or complex, it can be just as frustrating as if they micro-managed every memberâ€™s move. Turning a deaf ear to complaints or being slow to respond to make repairs makes members feel like they are pouring fees down the drain. If you see the sub-division lacks general care and members are reluctant to help, then consider this a red flag and pass on the deal.
Townhouses and condominiums should have some catastrophic insurance, especially if the location is prone to flooding, fires, tornadoes, or earthquakes. Ask the HOA about insurance for the recreational facilities as well. If there is damage to tennis courts and swimming pools, will those be covered? Part of the value of your home will be in the amenities, so just as your home is insured, so should the amenities.
Friend Or Foe
Home Owners Associations are often pegged as the enemy, but not all of them are like overbearing landlords. Their purpose is to keep the communityâ€™s appearance consistent with the regulations, so they may expect you to make expensive repairs you deem unnecessary. Before you buy a home managed by a HOA, make sure you are willing to comply to their rules and conditions.