If you’ve ever searched for a new home, you may have seen or heard the term homeowners association (HOA) more than once. For some home buyers, the existence of an HOA is a major deterrent; they don’t want to pay a fee to an association created to enforce rules for the property they call home. Other buyers may love the idea of an HOA and purchase a home because of the benefits it provides.
There is much more to an HOA than a group of people keeping a community under tight rule. It’s important to know the pros and cons of having to answer to one before you purchase your next home.
Simply put, a homeowners association is a structure found in planned developments like condominiums, townhomes, single-family homes and retirement and active adult communities. The members of the association are volunteers elected by the community, so when you enter into an HOA, your fellow residents are the ones helping to maintain a clean and beautiful neighborhood. They do this by enforcing the rules and regulations found in a document called the declaration of covenants, conditions and restrictions (CC&R). The rules found in an HOA’s CC&R cover everything from maintenance and repair issues to parking and landscaping.
Not all HOAs are the same, though, and the policies depend on what type of community you live in. For example, a condo’s HOA is known for being the most restrictive as well as the most expensive, as it owns the exterior of your home and all common areas, while you only own the interior of the condo. The rules and regulations of the association’s CC&R can cover anything from where you park your vehicle to whether you can display decorations outside or in your front windows. The HOA also manages any common areas, like the fitness center or swimming pool.
A townhouse HOA is similar to a condominium association, but they aren’t typically as restrictive because you own the interior and exterior of the townhome. This means that you can have a bit more control over what you do with those areas while abiding by other rules, like how you landscape your property.
Though these associations are most commonly found in condo or townhome developments, it’s becoming more popular to also find them in single-family home planned communities. Some of these HOAs provide security like gates or guards. HOAs for communities of single-family homes typically cost less because homeowners assume more responsibility. Homeowners are responsible for the upkeep of their own homes and providing insurance. The association could regulate what type of trees you can plant, whether or not you can leave your garage door open all day or night, or how long your grass can grow.
When you buy any property with an HOA, you agree to abide by all the policies found in the CC&R. You also agree to pay dues, commonly known as HOA fees. This money helps the HOA maintain the properties within the community. The fees are commonly due on a monthly basis and cover the neighborhood’s common areas and amenities like lobbies, pools, clubhouses, and parks. Some dues cover water, sewer, or garbage fees, and some maintenance services. Just like the associations themselves, the cost of HOA dues varies widely depending on where you live and what type of home you purchase.
If someone fails to pay their dues or comply with other HOA policies, the HOA can take action against them. What that action will be depends on the terms of the HOA contract. Even if you love the idea of an HOA, it’s important to carefully read the agreement and understand all of its terms before you sign.
Just like anything in life, HOAS have both benefits and disadvantages. How those pros and cons weigh in your home buying decision will depend on your priorities. If you like having a lot of amenities right at your fingertips, an HOA could be a huge benefit. Even though it’s money out of your pocket, you know that it's paying for the recreational facilities right outside your front door, like the swimming pool, tennis courts, or fitness center. If the idea of never mowing your lawn again fills you with excitement, an HOA may be the perfect choice for you.
A potential downside to an HOA can be how it manages funds. Some associations want a large cash reserve in order to pay for maintenance or legal obligations. Others offer lower dues but rely on funds levied outside of HOA fees for repairs and maintenance. These levies are similar to tax assessments, where the association could charge each homeowner a special assessment whenever a major expense pops up that they don’t have the funds to cover.
One of the best things you can do before you buy is to write down everything you want in a home and neighborhood. Do you want unfettered access to a swimming pool throughout the hot Midwest summer days? Is it reassuring to you that a group of people is responsible for the safety and upkeep of the neighborhood? Would you rather control everything about your home and the land it sits on and save the money that would go to the HOA? Figure out what is most important to you, then decide if an HOA fits into your vision of an ideal home.
If you’ve decided it’s time to make a change and commit to a home with an HOA, consider living in your local Epcon Community. Epcon is a planned community completely dedicated to active adults. These communities have an abundance of opportunities to meet new people who may be in similar stages of life as you are. Epcon Communities give you all of the benefits of an HOA, like clubhouse facilities and low-maintenance living, while allowing you to personalize your own single-level home to reflect your taste and style.
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