You simply MUST know your CC&Rs + ByLaws. And, if you are a person who follows the governing documents, you also need to watch and make sure that the CC&Rs are being enforced thru out the neighborhood. Boards are made up for the most part of lazy people who want to control others rather than enforce the governing docs. In my association, guess who's in violation of the CC&Rs? Almost the entire Board. They have done everything possible to hide docs from me and I had to seek legal action to get them. Hopefully, but not likely, I'll be able to recover those costs thru the legal system. BUT WHAT A HASSLE.
I am with the many HOs here who are speaking up against HOAs. I love my home, but should I sell, buying in a PUD for me is an absolute NO NO. They are lovely until corrupt management gets in and you can't get them out, or they simply recirculate their positions. All of us believe we are good people and we don't want to step on anyone's toes. If you are an extremely subservient person, get into an HOA and you'll likely love it. If you have the tiniest streak of independence, I suggest you find a home outside of a PUD.
WORSE YET, these are shadow governments with NO OVER SITE. There is no government agency that regulates their actions or operations. If the board and management company choose to operate as a banana republic, as many do, your only recourse is a private lawsuit. In many HOA documents you'll also find that bringing such a suit and losing leaves you liable for the entirety of the legal fees for the HOA as well.
HOA's sound good on paper but why do we need another level of government, especially one with no recourse once you've bought in? Remember, anytime someone says, "I'm from the builder and I'm here to help you", RUN :)
My experience as a treasurer related to an HOA board was interesting and shocking. Few home owners would get involved and even fewer attended the meetings as requested by the board. Quarterly financials sent to the home owners were either tossed in the trash or never reviewed by the owners. Some home owners even ordered the financial records to be audited at the expense of all home owners---the audit was clean of course. Then another home owner in the construction business did his own evaluation on maintenance/repairs---both home owners quickly realized the HOA was not difficient in its records or recommendations related to costs. The needed repairs were put on hold for nearly a year due to this and no properties were sold during this time. If HOA records are not made available to potentially new home owners run like the wind! Otherwise, be accountable and take responsibilty as a home owner in shared expenses and be part of the solution not the problem.
If fees are too low, the look of the community could suffer and periodic assessments may become necessary. That would not help property values.
If fees are higher than other similar communities, but the community is not well maintained, the wrong vendors are being used and the fees are not being appropriated properly. This too will harm property values.
If fees are in line with similar communities and the community is well maintained and there are adequate reserves, property values will benefit.
Most people do not like being told what they can or can't do on their property but appreciate that their neighbor does not have 6 cars on their front lawn. There is a fine line between HOA control and a neighborhood with no controls in place. That is why when we are buying a home we need to know what we are comfortable with.
Over the years I've found that a HOA is perceived as an advantage (worth more money) *only* to buyers who have never owned property in an HOA area.
Those buyers with a direct experience are rarely impressed with the fact that there is a HOA associated with a given property.
One potential buyer told me 'That anyone who believes you can't cheat an honest man has never had to deal with a HOA.
At 62, when I decide my next move, it will not be to another HOA. even when a condo might seem like the perfect spot for an old gal. Check title reports before you buy. If, in a condo, some HOs own several condos you'll be able to spot right away who controls the Board. Remember, if the economy tanks again, investors who own several properties often have their properties in condos foreclosed on first. Same w/second and third HOs..
If your HOA is made up of SFRs and TH, the President sets the tone. When his/her home is not maintained, or a tree comes down and is not replaced, then others will follow. A HOA is no guarantee that property values will be maintained, but it is a guarantee that you'll be ruled by thugs. The mentality of the Board is no different than a union or gov't that selectively enforces rules.
Better to be independent and live as free as you can live.
In Florida, it does not effect the value one way or the other.
Some buyers prefer an HOA, others do not.
Hope this helps,
Beachfront Realty, Inc.
Throw in the fact that HOA's have a terrible reputation. For all the people you hear who won't live in one, you never hear someone who demands to live in one. We wouldn't touch one with a 10-foot pole.
I received your email and appreciate your additional comments. As Sergio wrote below, before purchasing a property governed by an HOA the buyer should see it as a priority to obtain the necessary financial information before buying in to one these communities. In my limited authority as an agent, it is my duty to inform and obtain records for my buyer clients related to the associations. Cash cow or not, in the end it is always up to the buyer to purchase or not after reveiwing the records. If there is no disclosure law that would not stop me from obtaining the information for my clients. Common sense would certainly come in to play here. Thanks!
We found that the subdivions with HOA's outperformed the adjoining developments by an average of 12%.
In today's market, HOA's may be of greater importance because they, if well managed, can enforce maintainace standards. With more and more homes going to rental, this can be important as one can often tell a rental by the lack of upkeep.
On the flip side, HOA fees associated with Condo developments and some subdivisions can be so high as to make the subdivision too costly. I've seen some developments where the HOA fees are in the 50-60 cent per square foot range. this can add monthly payment upwards of $1000/month and make the units unaffordable.
As with most real estate questions, the answer would be dependant on the specific property in question.
For similar HOAs with similar properties where most of the features for the properties are the same, the one with higher HOA will not be able to attract as many buyers as the other one. It also depends on how high a percentage is the HOA fee compares to the price of the house. .
Having said that, when we do com parables, we may look at HOA fees, but it will not affect the property that much.
Keep in mind that in addition to compare HOA fees, you really want to read the CC&R and also look at their meeting minutes (at least 12 months) to make sure you understand how the HOA is run and their financial situation. Sometimes a poor managed HOA will have special assessment for homeowners or it will raise the HOA fee. You don't want to find that out after you bought the house.
For those that manage budgets well and keep things going well, it will have a postive effect on valuations.