If you are on the fence with regard to HOAs feel free to check out my blog post at the website below.
Common Area Maintenance, Exterior Building Maintenance, Limited Insurance, Sewer, Roof Maintenance and Termite. Other items that can be covered, but aren't necessarily as common include: Trash Pickup, Water and Cable.
It is very important to understand exactly what is/is not covered so that you are comparing apples to apples when buying a place that has HOA dues.
As far as how the monthly fee is determined, the Board/Association comes up with a figure that will enable them to cover their operating costs (such as gardening, water, insurance and property management) for the current year as well as any long term repairs and replacements (roofs, roads and parking lots.)
When evaluating the fees for a particular complex, be sure to look at a history of the fees, so you can spot any trends. Ask when the last fee increase was, the reason for it, and whether there are any anticipated increases and/or decreases. Also, be sure to see that the reserves for the HOA are solid, so as to minimize the likelihood of any large special assessments in the event of any unknown events/damage to the complex.
Aside from understanding the HOA fees, be sure you have a grasp of what the CC&R's are, so that there are no surprises once you move in (ie, you realize you are not allowed to have a dog).
Hope this helps those of you out there trying to understand the HOA side of things.
Chad Basinger REALTORÂ®, CPA, CFPÂ®
Typically HOA fees cover:
* Insurance for the common structures, liability, negligence by the Board, etc
* Reserve requirements, which are monies collected for future repairs and maintenance, such as roofs, paintings, etc
* Maintenance of common areas like clubhouses, pools, spas, etc
* Water (sometimes includes water to units). Sometimes includes the heating of the water in common boiler rooms.
* Electricity to common area
It's important to know where the HOA responsibility ends and the unit-owner's begins. In a condo for instance, usually the HOA is responsible for the plumbing inside the walls, but the owner is responsible for a clogged drain pipe in the exclusive use portion of his pipes.
Let me know if I can help any of you further. Sandra Hatherley, Century 21 1st Choice, 619.887.6091 or email@example.com
An HOA could be for the benefit of a small 4 unit condo complex or more than one thousand homes. Condominium ownership is very different than a Planned Unit Development, yet they both have an HOA and assessments. Some properties me be part of more than one HOA too. Large developments often have a master HOA covering a large area and smaller HOAs covering fewer homes. So, some homeowners will have more than one association to pay each month.
As an owner and board member in an association, I am often surprised by how much new owners don't know about the restrictions placed on them by the CC&Rs. Even though they receive a copy of them during the purchase process, some new owners find themselves shocked when they can't part their RV in the driveway, paint their front door purple, or put a second story on their home.
- Common Area Maintenance
- Exterior (Landscaping)
- Roof Maintenance
- Trash Pickup
In addition, it may cover the following:
- Water / Hot water
- Exterior Bldg Maintenance
- Limited Insurance