Breaking Down Homeowner’s Associations (HOAs)

If you are buying a condo, townhouse, or free-standing home in a neighborhood with amenities such as a shared swimming pool, tennis courts, or parking garages, odds are that there will be a homeowner’s association (HOA). But, what is an HOA and how will it affect your quality of living? 

What is an HOA?

An HOA helps the community maintain a pristine appearance and make sure that all amenities and common areas are functioning smoothly. If something is broken, it is not up to the homeowners to fix it. Instead, the HOA is responsible for getting the job done. 

HOA Fees 

Fees vary immensely from neighborhood to neighborhood. The number and size of amenities in the neighborhood affect how much you’ll need to pay each month. Fees can also vary within your development. These can be for many different reasons, including the square footage, location, and orientation of your home, as all these factors will affect how much upkeep your property will need. 

HOA Rules 

HOAs are made up of homeowners in the community, who are elected by other homeowners. Board members will set up regular meetings to discuss major decisions and issues within the community. Homeowner’s associations don’t solely focus on the common areas of a community. They also have rules regarding your own home. A copy of these rules and regulations, called covenants, conditions, and restrictions (CC&Rs), are given to homeowners upon moving in, where they are required to sign a contract saying that they will abide by the rules. 

Some examples of things that are often covered in a CC&R are:

  • Type of mailbox
  • Size and breed of dog (some HOAs will require additional insurance for breeds such as pitbulls, or will prohibit breeds entirely)
  • What color you paint your house
  • What kind of curtains to use if windows face the street
  • How long your lawn can grow

Before moving in, be sure to get a copy of the HOA rules so that you know what you will be required to do (or not to do). If you can, try to attend a HOA meeting before making your final decision. 

What happens if you violate the rules?

Just like the fees, consequences for breaking the rules vary from development to development. If you break the rules, or fall behind in dues, management could be able to evict you from your property. Some HOAs even have the right to foreclose on your property if you don’t follow the rules or don’t pay your dues. 

Tips for Purchasing a Condo

buying condominium guide

Hunting for a new home can be an exciting and stressful time. Before settling on a new home, consider factors such as mortgage payments, post-closing costs, school districts, and local shopping complexes in your home purchasing process. A condominium, also known as a condo, is an individually owned apartment in a building or complex of buildings. Purchasing a condo builds equity on a property and may be a less expensive investment as compared to buying a house. 

Here are some helpful tips to keep in mind when looking for a condo. 

Tips for Purchasing a Condo:

Condo Type:

Whether you prefer a low-rise, a high-rise, with or without amenities, it is essential to research condominium styles to find the best style for you. Purchasing the largest affordable suite may be beneficial in the reselling process. For example, while a condo with a beautiful view may not be essential to you, it creates a better resale deal. Consider hiring a professional realtor. They can assist you through the purchasing process as well as answer questions.

Visit the neighborhood:

Explore the surrounding area at different times during the day. Visit the neighborhood in the morning, late afternoon, and night to get a feel for the region. Check out local schools, the city culture, safety measures, views, transportation opportunities, and traffic patterns. Moreover, talk to current occupants of the building about the neighborhood.

Condo Rules:

Every association has a specific set of rules to ensure a high-quality atmosphere in the building. For example, determine if the building allows pets. Moreover, do not conduct any illegal business inside your condo. Avoid breaking any association rules.

Additional Fees:

Besides mortgage installments and taxes, be aware of possible additional payments associated with buying a condo. When purchasing a condo, townhouse or another type of property in an organized development, you may be obliged to pay Home Owners Association (HOA) feesAssociation fees cover common expenses such as insurance and grounds maintenance. Furthermore, consider possible condo luxuries. This may include doormen, high-end fitness centers or pools, storage spaces, lockers, or parking opportunities.

Compare property value as well as any additional costs for a clear understanding of overall condominium pricing.

Condo’s Financials:  

Inquire about any construction problems and the condition of the condo. Review financial records, past performances, and possible condo emergency funds. Emergency funds cover the maintenance and missed one or two association payments. Additionally, explore special assessments of the building. Special assessments are a tricky yet vital part of the home buying process. It is essential to discuss any special assessments such as a leaking roof. If the condo is located in a previously levied earthquake zone, determine if the condo is retro-fitted. This is crucial in preparation for any possible future storms.

 

There are many factors to consider when purchasing a condo. After narrowing down to one or two neighborhoods, compare prices of condos sold in that area. Visit the suite at least twice before making any final decisions. Furthermore, ask your lawyer to review the Condominium Documents and Status Certificate. Do plenty of research to ensure your dream home. 

Understanding HOA Fees

HOA Fees

What are HOA Fees?

When you purchase a home in a condominium, townhouse, or another form of planned development area, it is often necessary to join the homeowners association and pay the monthly fee that accompanies the association. In these types of communities, many people live in the same space. That said, all residents are responsible for keeping and maintaining the common areas, such as landscaping, elevators, swimming pools, clubhouses, parking garages, sidewalks, roofing, building exteriors, and many other features of the community.

How Much are HOA Fees?

These fees can start as little as $20 a month but more often range from $200 to $400. If the building is more upscale and has more amenities, the homeowners’ association (HOA) fees are likely to be more expensive. In addition to your predetermined homeowners’ association fees, there may be an additional charge if a major expense in incurred that can total anything up to — and sometimes over — $1000.

What do HOA Fees Cover?

These fees help to maintain the quality of life for each of the residents. They cover a multitude of different things, including city services, such as trash removal, water, and sewage, insurance, lawn care, pest control, community pools, and maintenance and repairs to the outside of the building.
The homeowners’ association sets out certain rules that all the residents must follow that help to instill a feeling of homogeneity within the community. These may include anything ranging from what color you can paint your home or the color of your front door to the type of the vehicle you can park in the street or in your driveway, and even the sizes and types of pets permitted. The rules can also extend to your environmental practices, including what fertilizers, pesticides, and sprinkler systems you are allowed to use.

HOA Rules & Regulations

Copies of HOA rules may be found online, but if not, it is important to ask your real estate agent for them. Pay attention to rules regarding fines and whether the homeowners’ association can foreclose your property for not paying the homeowners’ association fees. These rules and fees can differ from community to community, so it’s important to know and understand what rules are in place in yours.

If you decide to enter into one a community with HOA fees, research the HOA rules and fees before signing the dotted line. You want to make sure that you agree with the rules and are able to comply with them. If not, there may be other options for you to explore.