Homeowner Associations (HOAs) are becoming more and more common, especially with new housing developments or gated communities. If you are considering a move to a community with an HOA, it is important that you understand what they are, why they exist, and what that means for you.
The National Association of Exclusive Buyer Agents (NAEB) explains that “basically, homeowners associations are concerned with managing deed restrictions and protective covenants, along with the care and maintenance of common areas. This is intended for the purpose of preserving property value and enhancing a quality of living.”
In other words, a homeowners association makes rules for the community and enforces those rules. They are also responsible for the care and maintenance of common areas like a community pool or gathering hall, sidewalks, and play areas.
When you move into a community that has a homeowners association, you are usually obligated to join that HOA. You will also be given a copy of the HOA Declaration of Covenants, Conditions, and Restrictions (CC&Rs), and will be responsible for abiding by them.
There are both pros and cons to homeowner associations, and you should weigh those for yourself before deciding to purchase a home in an HOA community. Here are a few items of interest, along with both pros and cons for each.
1. The HOA Board of Directors is elected from among the residents of that community.
Pro: Because they live in the same community governed by the homeowners association, they have a vested interest in how things are done. They are not random, political strangers making decisions that would have no effect on them.
Con: The Board of Directors is made up of homeowners just like you who very likely have no specific training or education on how to run a community. This could result in some arbitrary rulings that may not be entirely objective, and could lead to conflict among neighbors.
2. The HOA Dues are set by the Board of Directors
Pro: Again, the Board of Directors are all community members too, so they will be required to pay the same dues as all other community members.
Con: Even among members of the same community there will be a variety of income brackets represented. An amount that may seem insignificant to one homeowner, or a group of homeowners, could be a significant burden to others.
3. The HOA Covenants, Conditions, and Restrictions (CC&Rs) are uniform and apply equally to all homeowners in the community.
Pro: You likely won’t see yards overgrown or full of junk, broken fencing, or have to listen to your neighbors choice of music blaring at full volume after a certain hour.
Con: Those same rules may deny you the right to personalize your own home and yard. Regulations may include limits on flagpoles, political signage, the addition of outbuildings, even the type of fencing or mailboxes allowed.
4. Homeowner Associations handle maintenance and repair of common areas.
Pro: If the pump or filter for the community pool breaks down, or equipment in the community playground needs to be replaced, the HOA makes those arrangements and pays for the repairs or replacements using funds from your HOA dues.
Con: If repairs or replacements are more expensive than expected, and there are not sufficient funds available from your regular HOA dues, the Board of Directors for the HOA can issue an additional “assessment” requiring every homeowner to pay an additional amount to cover the cost. Whether or not you and your family use the community pool or playground, you are still required to pay the same amount.
5. HOAs generally have some legal powers, depending on how they were set up.
Pro: The HOA can fine your neighbor if they are breaking rules concerning home and yard appearance or if they are causing damage to neighboring properties. This protects your property and property value.
Con: The HOA can also require you to pay fines if, for example, you have a flag mounted on your home that is the wrong size or mounted the wrong way. They can also, in some cases file for a lien against your home if you get too far behind on paying your HOA due
The HOA Board of Directors is comprised of members of that specific community, so they have a vested interest in protecting it and in maintaining property values and safety.
The HOA Board of Directors sets the amount for dues, as well as the rules and regulations for the community and, as members of the community, are also bound by those rules and regulations the same as any other homeowner in the community.
The HOA handles all maintenance and repair issues for common areas. They contact repair companies, schedule appointments for repairs, and, using funds from your HOA dues in a reserve fund, write the check to pay for it.
The HOA holds some legal powers which allow them to issue fines to homeowners whose actions may be bringing down property values.
As ordinary members of the community, the members of the HOA Board of Directors likely do not have any specialized education or training in community management. Therefore, some rules ad regulations passed by the Board may not actually make sense or the community as a whole, and may not actually be in the best interest of everyone in the community.
The HOA does handle all aspects of maintenance and repair for common areas in the community and uses money from the HOA dues to pay for it. However, if for any reason there are not sufficient funds to pay for it, they can assess an additional required payment from ALL homeowners in the community whether you use the common areas or not.
The HOA does have some legal powers, and the same powers that protect your property values can be turned on you if you are deemed to be breaking HOA Regulations. These regulations can also greatly limit how creative you can be with your own home and yard.
Before purchasing a home in a community with a homeowners association, educate yourself. Ask for a copy of the HOA Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and make sure you fully understand what will be required of you. Carefully weigh the pros and cons so you can make an informed decision that is best for you and your family