What Exactly Is An HOA?
If you are house hunting, you have undoubtedly heard the term “Home Owner’s Association”. You may be confused about what HOAs are, and may have even heard both good and bad reviews of buying a home within an HOA community. Not all HOAs are the same, and the benefits and drawbacks of an HOA will be determined by your own financial and lifestyle situations. Preston Group is here to give you some basic information and tools to help you make the right purchasing decision for yourself.
What Exactly Is An HOA?
Another name for an HOA is a Home Owners Association. Lawyers.com calls an HOA, “Rules, restrictions, and benefits that come with buying a property in a community that has its own governing body”. Each HOA has its own set of rules called covenants, conditions and restrictions (CC&Rs) that both apply to your behavior as a homeowner, and your home. Among other things, CC&Rs define; what type of improvements you can perform on your home or yard, where and when you can park in the neighborhood, noise restrictions, usage of common areas, and pet restrictions.
In addition, the HOA may provide; landscaping maintenance of common areas, enforcement of CC&Rs, review of homeowner requests, and a forum in which to settle disputes among neighbors. HOAs also may provide homeowners with attractive lifestyle amenities in the neighborhood such as walking trails, a dog park, guarded security, or a community pool area.
Homeowners in the community pay fees to maintain the HOA. The fees are generally based on the size of the community and the amenities provided. This income is used by the HOA for both operating costs (landscaping costs, insurance, etc.) and for capital costs (major renovation, additions, etc.), as well as management costs. Fees are paid on a monthly or quarterly basis and if not received, could result in a lien on your home. If you live in an HOA community you cannot opt-out of membership in HOA, it is automatic and mandatory. Additional fees may be assessed to homeowners for violation of CC&Rs and/or special projects necessary within the neighborhood. Here’s a bummer- HOA fees are not tax deductible!
If you want to read more about the creation and legal structure of HOAs, check out this great article.
Why Would An HOA Be Good For Me?
HOAs are designed to enhance the lifestyle of homeowners by offering amenities that would otherwise be cost-prohibitive. Many homeowners find a lot of value in having a community pool available instead of paying to have one built in their yard, or having a safe and local walking trail. HOAs also maintain the aesthetics of the neighborhood. When common areas are landscaped and maintained and the outside appearance of homes are kept consistent, property values benefit. Finally, HOAs can instill a feeling of safety among the community. Some HOAs have guard gated entries or hired security, and just knowing that your neighbors are held to common standards can be comforting.
What Should I Look For?
Most importantly, you should review the CC&Rs for any home you are considering purchasing. Read the documents thoroughly to ensure that there are not restrictions that will interfere with your personal or professional lifestyle. For example you may require parking for a commercial vehicle, or have a home business with customers visiting often. These are the types of things that may be restricted by an HOA’s CC&Rs. You should also review the financial status of the HOA. Ensuring that there is a healthy reserve fund can help to avoid paying expensive assessments in the future. Finally, you’ll want to know how you can become involved in the HOA if you decide to. This is a great article about how to spot a bad HOA.
HOAs can provide great amenities and protections for homeowners, but aren’t for everyone. As you search for your perfect home first have an idea if an HOA community is appropriate with you. If it is, take the time to protect yourself by knowing the HOA cost, restrictions, and financial status.
Finally, don’t forget that the best resource for information about your move can be a live person who can listen to your needs and address your concerns. Shawn M. Preston has been a successful real estate agent in the Las Vegas area for over 13 years and is ready to help you with your transition into our community. Give Shawn a call anytime; 702.350.2289.
Did you enjoy this article? Check out our other blog posts here.
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