Is a Community with a Homeowners Association (HOA) Right for You?

If you ask 100 buyers whether a community with an HOA is right for them you are sure to get a variety of answers ranging from "Absolutely!" to "Are you crazy!" and even "What is an HOA?". Opinions vary on their purpose and follow-through, and while they are rampant in some parts of the country, other areas have very few HOA communities.

The vast majority of homeowners want neighborhood integrity, community harmony, and an investment in a home that continues to grow equity. Some find that Utopian existence in a non-HOA community while others embrace HOA subdivisions with the peace of mind knowing there are rules that you expect to be enforced. Only YOU can decide if an HOA is right for you and your family.

What is an HOA

An HOA is typically a non-profit organization established by the real estate developer and handed over to the community upon development completion or after a percentage of homes are built. The HOA provides rules regulating maintenance of common areas and enforcement of deed restrictions (filed with the property records) and has the goal of maintaining property values and enhancing the neighborhood's appearance. A copy of the Covenants, Conditions & Restrictions (CC&R) is normally provided to buyers at closing.

Once the HOA is handed over to the community an HOA Board is established (by vote of the subdivision members) to handle disputes and enforce the CC&R rules. They also collect dues for common area upkeep (i.e. pools, play areas, entrances, etc.) and can impose special fees to pay for emergency repairs when the association lacks sufficient funds to fix the issue(s).

The majority of HOA problems stem from a handful of issues. Some of the more common "problems" are:

• Overzealous monitoring by board members
• CC&R interpretation
• Homeowners who willfully or unknowingly break the HOA rules
• Non-dues payment by residents

Does this Subdivision have an HOA?

Drive through a Warner Robins subdivision or a condo community in Long Island where the landscaping is well maintained, litter is non-existent, and visible eyesores are nary to be found and you can bet homebuyers are going to be impressed. Conversely, travel through a community that looks messy and unattended and the opposite response is typically noted. While those conditions alone are not always an indication that an HOA exists (and is enforced), the inference is often made.

Here are several resources homebuyers can use to determine if a subdivision has an HOA:

• Your Realtor. If they closed a home in this subdivision, they have the information.
• The developer or on-site sales team. If homes are still being built, they will know.
• Local clerk of courts or the courthouse at the county seat. HOAs must record their CC&Rs.
• A Real Estate Attorney. They handle a lot of closings and will most likely know.
• Do a Google search. Many subdivisions have community websites and the HOA information is often available.
• Check with homeowners in the subdivision. This is less awkward if you know someone in the community in question.
• U.S. resources include AboutMyHOA, Community Associations Network , and Community Associations Institute

Features of an HOA

They can be very restrictive with the HOA Board ruling with an iron fist, lax and easy going, or someplace in-between the extremes. While there is no standard list of rules homeowners must adhere to, here are some common features that many HOAs have rules for (or against):

• Mandatory membership with dues (monthly, quarterly, or annually)
• Architectural changes
• Enforced exterior maintenance standards (community landscaping, security, etc.)
• Common area use (clubhouses, exercise facilities, pools, etc.)
• Commercial use of property
• Storage of boats, RVs, trailers, or work vehicles
• Erecting a tree house or basketball hoop
• Lawn care and shrub/tree trimming
• Out-building setbacks
• Fence, landscaping, and paint restrictions
• Street parking
• Number of pets
• Age restrictions
• Window covers
• Renting properties
• Yard signage (political, defamatory, etc.)
• building/roof materials
• Seasonal decorations (outdoor lights, yard ornaments, etc.)

What Happens to HOA Rule Breakers

That depends on how strictly enforced the CC&R rules are and how stringent/lenient the state laws governing HOA bylaw enforcement are in the state you live. In general, HOAs have the ability to generate fees, fines, establish liens, solve minor disputes, or take homeowners to court for serious (and often repetitive) infractions.

For the vast majority of homeowners living in an HOA subdivision or community, the experience is nearly transparent. Follow the rules if you live in an HOA subdivision and issues should not arise.

Potential buyers need to weigh their options on HOA living and determine if the guidelines and enforcement of those HOA rules are a good fit for their values and lifestyle. Remember, owning a home is an investment and doing your part to keep the subdivision looking nice will help keep property values UP.