What is a homeowners association (HOA)? That’s a good question! According to Wikipedia, “a homeowner association is a corporation formed by a real estate developer for the purpose of marketing, managing, and selling of homes and lots in a residential subdivision.” If you’re considering living in an HOA, you’re going to need some details about how it works.
How an HOA works
An HOA is an entity funded by residents to take care of certain common interests. Homeowners usually pay in monthly or annually for things like landscaping common areas, maintaining facilities and roads, marketing for empty lots, and enforcing rules.
We often hear from clients that there are many benefits as well as disadvantages to living in an HOA and we thought we’d take the time to give you a simple breakdown.
Benefits of living in an HOA
1. Exclusive Amenities - So you enjoy relaxing by the pool or walking around the lake? Most HOAs offer several amenities for the homeowners to enjoy. Other common amenities include fitness centers, well-maintained common areas, and private halls for parties.
2. Tidy Homes - Most HOAs require homeowners to abide by a certain code of conduct with their house. Things like yard decorations, exterior paint, and mailboxes are often required to fit the style guide set in place by the HOA.
3. Manicured Grounds - When you live in an HOA there are often common areas maintained by professional landscapers rather than the residents. In some situations, your personal yard may also be covered by the fees you pay in.
Disadvantages of living in an HOA
1. Board Members - This may not always be a disadvantage, in fact it could be an advantage. We only mention it because sometimes dealing with people can be tough. If you want to have your say in the HOA you will have to be active in the board and many people don’t care to do that.
2. Rules - Dealing with rules is also a disadvantage that could be an advantage. Rules like quiet hours and mailbox requirements could be great...until you want to have a party and put up a cow mailbox. Chances are this won’t be a deal breaker, but it’s worth checking into before you sign any paperwork.
3. Fees - If you choose to live in an HOA, you will pay fees. The rate depends on many factors, but be prepared to shell out some cash each year for the services and amenities we mentioned. As long as the HOA maintains and operates everything as they are supposed to, your money should be well spent.
Do you live in a homeowners association? What are your likes and dislikes?