What You Should Know Before Joining A Homeowners Association (HOA)
If you’re looking for a new home, condo, or apartment, you probably encountered listings described as ‘HOA-managed.’ Homeowners associations have become more common in the past years, with over 50% of the American population living in HOA-managed communities.
That said, for first-time homebuyers, it’s essential that you become aware of what an HOA is and understand what you’re buying into. After all, living in an HOA-managed property can impact your quality of life and financial situation.
In this article, you’ll learn the basics of HOA, its purpose, and the numerous benefits it offers. Let’s start!
HOA: What Exactly Is It?
Short for homeowners’ associations, HOAs are governing bodies within a community or neighborhood. These regulatory bodies often exist in planned housing development, condos, apartments, and subdivisions. An HOA is run and managed by a board of directors consisting of elected resident homeowners overseeing the community management.
What Is Their Purpose? HOA Fees And Regulations
At its core, HOAs are created to manage a community or neighborhood. To do this, HOAs require mandatory fees from members. These dues may be collected monthly, quarterly, or annually depending on what’s agreed upon by members. These funds are used to help develop and maintain amenities and the entire community.
Generally, HOA funds pay for maintenance services such as landscaping, building cleaning and upkeep, and pest control. If your HOA has a property management team, some funds may also serve as payment for their services. The funds are also used to maintain HOA insurance, protecting the community against typical property damage and liabilities.
A part of HOA funds is also deposited into an HOA’s savings account to build a reserve fund, which can be used for future expenses, including amenity development or repairing large-scale damages to the community due to natural disasters. Often, when the reserve fund becomes insufficient, members may be asked to pay a special assessment on top of regular fees.
Aside from collecting fees, HOAs also develop and implement strict rules and regulations regarding residential properties within their jurisdiction and the community’s well-being. Formally called covenants, these rules and regulations are executed to maintain property values and ensure harmonious living within the community.
Please note that no two HOAs are the same. Different HOAs have different rules, with some being less restrictive than others. For instance, some HOAs enforce sensible and relaxed regulations for community courtesy, such as noise restrictions or trash disposal schedules. Other HOAs will have a long list of rules categorized and divided into numerous chapters covering everything from the type and color of your fence to the height of the grass on your lawn.
The Benefits Of HOA
Choosing a home governed by an HOA comes with numerous benefits. However, the benefits can vary since management differs from one HOA to another. That said, here are the general benefits of joining a well-managed HOA community:
- Access To Various Amenities
HOA communities are known to offer fantastic amenities that can improve the overall lifestyle of residents. From swimming pools, children’s parks, and playgrounds to clubhouse and fitness centers, these amenities provide a space for residents to create social connections and interactions.
Unlike public amenities, these facilities are exclusive for resident use only, making them less crowded and better maintained.
- Enjoy Higher Property Values
When a community is run well, homeowners can expect a consistent or increased home and property value. Statistics show that well-managed HOAs can help boost a property value by over 4%.
While HOAs demand fees from their members, most funds are used to upgrade the community and help keep up with property value. This keeps the entire neighborhood looking desirable. Furthermore, the numerous amenities available in HOA communities are also considered a plus point, attracting potential buyers and making it more likely to close deals faster.
- Reduced Responsibilities And Peaceful Living
In most HOA properties, basic maintenance stuff and utilities are already covered. From landscaping and pest control to rolling over gas, water, and sewer fees into one single payment, living in an HOA community reduces or eliminates tedious tasks from your schedule.
In addition, some HOA rules and regulations focus on ensuring safer and more peaceful living. From ensuring security service to handling neighbor disputes, HOAs can bring peace of mind and ensure a more harmonious community.
Joining an HOA can be daunting, especially if it’s your first time. Since it can significantly impact your life, before you buy your next home and move into an HOA-managed community, be sure to familiarize yourself with this type of property–you’ll be glad you did.