A Homeowners Association (HOA) is a board of directors elected by other residents to set rules and regulations for the neighborhood. HOA’s exist in single-family home communities and condo and townhouse developments. When you purchase a home in one of these communities, you agree to the rules and regulations, so you need to be sure that you want to live in an HOA-run community. Today we want to outline some of the significant pros and cons of HOA’s, so you can be aware of how these organizations can affect your life after you move in!
Pros of a Homeowners Association (HOA)
A well-run HOA can be a wonderful part of living in a neighborhood! An HOA can offer several benefits to homeowners, from well-maintained community spaces to a beautiful and well-maintained neighborhood.
Common Area/Amenities
Neighborhoods with a homeowners association usually have some sort of common area. In some neighborhoods, this might be a community park or open space. You may even have tennis courts, clubhouses, and pools in condo or townhouse developments! The fees paid to the HOA are used to maintain these common spaces for all residents to enjoy. If you live in a townhome or condo development, the HOA typically maintains the building from the outside walls to the studs, so exterior maintenance is covered by HOA fees.
Dispute Mediation
Hopefully, there will never be any disagreement between you and your neighbors, but if there is an HOA can help resolve the issue. Since an HOA has a set of rules that all residents have agreed to when they purchase their homes, the HOA can mediate the problem based on the rules and help the neighbors avoid a more significant issue.
Rules for the Neighborhood
If you are a person who wants to live in a neighborhood that does not allow livestock in the backyards or parking RVs on the street, then an HOA will be appealing. HOA rules may cover MANY things, so review the CC&Rs carefully to ensure that everything you are concerned about is covered.
Neighborhood Appearance
Typically, an HOA has a set of rules for how each property should look. Exterior maintenance, lawn care, and paint colors are ways that an HOA maintains a cohesive look throughout the neighborhood. While some might find it restrictive, others can rest assured that your neighbor will not paint their home purple. If you are concerned about the look of your neighborhood, then an HOA is a huge plus.
Cons of an HOA
So, what are the drawbacks to an HOA? Many homeowners do not want any restrictions on what they do on their property. For those buyers, the following are some significant cons.
HOA Fees
Fees, fees, and more fees. A homeowners association requires monthly payments from the homeowners. These fees are used to do maintenance on common areas and other neighborhood charges. The fees can range from minimal to relatively high based on what they cover. In communities with many amenities, the fees can be extremely high. In addition to regular monthly payments, you can also be charged a special assessment if a significant project needs to be completed. For example, if you live in a townhome community and the HOA determines that they need to re-paint your building, the cost can be split between all the homeowners. Make sure to factor the monthly fees into your mortgage payment.
Restriction on Changes
Since the primary goal of the HOA is to maintain a cohesive neighborhood appearance, there are going to be restrictions on the changes you can make to your home. If you want to paint your home, you may have to choose from a pre-selected color selection. If you’re going to make any exterior modifications, such as a deck or new fence, you may have to submit a plan to the HOA for approval. While these rules are in place to maintain the neighborhood’s aesthetic, they create a level of oversight that some homeowners may not want to live under.
Rules for the Neighborhood
While neighborhood rules can be a pro, they can also be a huge con. If you like to work on cars or want to have your RV in your driveway year-round, HOA may tell you no. As we mentioned above, the rules of an HOA can be restrictive. HOA’s have all the say in the neighborhood’s rules, from how long you can leave holiday decorations up to how your landscaping looks. If you are not a rule follower, an HOA will be a thorn in your side.
Not all HOA’s are the same; some are VERY active and provide strict oversight for the neighborhood. Others may collect some fees to maintain the shared space, and that is it. In addition to reviewing the CC&Rs, talk to some of the neighbors before deciding about your purchase. They will be able to give you some insight into how the neighborhood HOA operates. If you would like to chat more about purchasing a home get in touch! We would be happy to put you in touch with one of our trusted Realtor partners!
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