A study by the Foundation for Community Association Research in 2013 revealed that about a quarter of all Americans live in a neighborhood that is governed by some form of homeowners association (HOA). Of those homeowners, about 70 percent believe the rules of the HOA are beneficial for their property value.
However, if you are unfamiliar with the general concept of an HOA or the rules of a specific HOA before buying your house, you might be surprised by some of the ordinances or violations you discover after you move in. Therefore, before you close on a home in an HOA, you should have at least a basic understanding of what you’re getting yourself into.
Here’s a brief overview of HOAs and what you should know about them, from our HOA consultants in Chandler, AZ.
What is the purpose of an HOA?
HOAs operate much like local and municipal governments. The HOA Board of Directors set specific rules for their community, and oversee the maintenance of the common area property like roads, landscaping, walls, pools, etc. They also contract association vendors, manage the association’s budget, and ensure architectural standards within the community are upheld.
In many cases, the board works with a professional management company and/or attorney to reduce their liability exposure by relying on experts to ensure they are operating within the guidelines of their association’s specific governing documents and state laws.
Ultimately, the purpose of an HOA is to protect and enhance property values, enforce the governing documents, maintain the common areas, and uphold the architectural standards that make the neighborhood a great place to live.
Fees that come with HOAs
In most cases, there are assessment fees associated with HOA membership. These fees vary widely depending on the community. They could be as low as $100 a year or as high as $1,000 a month. The amount you pay will be based on the amenities within the community and the overall homes within the membership to spread the operational costs amongst. The assessment fees typically go towards standard operational maintenance costs for the community like utilities, insurance, landscaping, pool maintenance, etc.
If you fail to pay your HOA dues, there is a chance (depending on the rules of your specific HOA and governing laws) that the association will have the right to foreclose on your home and take it from your possession, even if you are making timely mortgage payments. This is something you should be aware of when closing on a home within a planned community.
The primary advantages of HOAs
There are some advantages that come with living in an HOA. The association will ensure your neighbors keep the exteriors of their properties in good condition. They may also be responsible for maintaining exterior maintenance items, such as roofing, painting, or landscaping. Before entering into a purchase contract on a home, you will want to know what amenities are included in the association fees and the items the association maintains on your behalf.
You’ll have shared amenities such as playgrounds, lakes, pools, and gated entries. While some rules might restrict certain freedoms (like size and numbers of household pets and paint colors), they also help to protect the member’s property values and ensure peaceful enjoyment of their homes.
Ultimately, you should consider what exactly you hope to get out of an HOA, whether the fees and restrictions are worth the benefits to you, and what level of leniency you’re looking for out of an HOA. For more information, contact our HOA consultants in Chandler, AZ.
