If you are pondering submitting an offer on a home, there are a number of factors to consider in addition to the house itself. Homeowners Associations (HOAs) are one example. Living in a community with a homeowners association can have both benefits and detriments. A prospective buyer ought to make themself well-aware of the implications of living in a community with a Homeowners Association before making an offer on a home.



What Exactly Is An HOA and What Role Do They Play?

Dictionary.com provides the following definition: “A Homeowners Association is an organization in a condominium or other planned housing community that makes and enforces rules about the appearance and maintenance of properties and that maintains common areas with money from membership fees”.

In other words, an HOA is a governing body with authority over certain aspects of homes within the association’s boundaries. An HOA maintains a board of directors and is funded and operated through its resident fees. The board has regular meetings, maintains a budget, and is responsible for enforcing the association’s regulations and rules (which are legally enforceable).

A well-run HOA can improve property values because they work to make sure the community maintains a certain standard as far as how homes and lawns look. Poorly run HOAs can be expensive and challenging for homeowners due to the bureaucracy involved.

If you’re a member of an HOA, you will likely pay monthly, quarterly, or yearly dues intended for use in maintenance of HOA common areas (like clubhouses, pools, walkways, and lighting, depending on the specific HOA). Fees vary significantly depending on location and the neighborhood or building itself. HOA fees might range from fifty dollars a month to thousands of dollars a month.


How Do the Rules of an HOA Work?

HOA rules are referred to as conditions and restrictions, or covenants. If there is an HOA in a community where you’re considering buying a home, you need to understand their rules well.

HOAs require property owners to follow their covenants, conditions, and restrictions (CC&R). These enforceable legal documents list what residents can and cannot do with their property. The majority of HOA rules are related to the exterior of a home. For example, you may be required to maintain your lawn or home exterior in a certain way. You may be required to refrain from use of extreme colors if you choose to paint your house. In condos and apartments, the rules might be related to things like pet ownership.

If you choose not to follow the rules of the HOA, initially, you’ll simply be reminded to comply. If you continue to disregard, they may fine you. Beyond the point of fines, continued lack of compliance may face you with a lawsuit worse. Additionally, if you allow HOA fees to go unpaid, the HOA board can put a lien on your home or even require you to foreclose, depending on the state in which you live.


Further Recommended Research & Considerations 

– Ask if you can attend an HOA meeting, or if that’s not possible, call the HOA to request a copy of the most recent meeting minutes. This will give you a feel for the behavior of the board members and whether their top priority is resident well-being.

– If an HOA is in poor financial standing, residents within the association may be hit with an unexpected assessment and fees if the community common areas need work. Call the city to inquire upon the HOA’s standing (or have your real estate agent call for you). If the city is unable to provide the requested information, try calling the HOA themselves. Though some HOAs consider such information privileged, others may be willing to share enough to give you the answer you need.

– Do homeowners within the association have problems with the board? If you have a family member or friend-of-a-friend who already lives within the HOA, try requesting they share their perspective on the HOA’s board.

– Will fit with your lifestyle? Are you’re comfortable with the kind of control the HOA would exercise over your family’s home and living environment?

– Go over, in detail, what the HOA fees will include and ask your real estate agent for clarification if there are rules or fees that don’t make sense.

–  Consider how the HOA fees and regulations will affect the resell value of a home you’re looking at. Many buyers simply don’t want want to deal with an HOA, and if you may want or need to sell your home in the coming years, your pool of buyers may be limited.

–  HOA fees are similar to taxes in that, over time, HOA fees are nearly guaranteed to raise. If you are barely able to afford the HOA fees today, you’ll likely have trouble affording them in the coming years.