Anytime you have multiple owners contributing to the expenses for commonly owned areas, you will have an HOA, or Homeowners Association. This can be for a condo complex or single family homes in a community with amenities. It will be the responsibilty of the HOA to maintain and insure such features as a clubhouse, pool/spa, tennis courts, gated entry, boat docks, parks... any feature that the community collectively owns. This can also include services such as water, trash removal, pest control or cable that is shared by the owners. Each property owner in the community also possesses a percentage of these common areas, therefore, is part of the HOA. Along with contributing to the costs, each owner will have a vote in determining how the community and its features are maintained.
In the case of condominiums, the shell of the building, itself, is also deemed "common" area, and is maintained by the HOA. The entity's responsibilities will also cover purchasing insurance on the building, including flood and windstorm insurance for our coastal properties in South Texas. Some HOA's choose to incorporate this expense in with the other maintenance/operating fees for the community for simplicity. Some, however, will bill the insurance expense separately. Therefore, when purchasing a property that does exist in an association, it is important to know what the fees cover and when they are billed (monthly, quarterly or annually). More often, if the HOA fee is a low one, the insurance is a separate cost, which will need to be included when calculating finances for a loan.
It all seems very complex, so some HOA's hire outside management companies to handle all the particulars... especially for large communities or condo complexes. However it is handled, the extra HOA fee will ensure you have additional amenities to your property and peace of mind to enjoy them! For more details on this topic or additional assistance with real estate dealings in South Texas, contact:
H. Therese Eaton, broker/owner
Rio Isla Properties