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All About HOAs
When you begin searching for a new home, there are many things to consider. One of those is whether or not you’re willing to purchase a home that’s part of an HOA. Here’s what you need to know before deciding.
What is an HOA?
HOA stands for Homeowners Association, an organization that has limited power over a community. They’re commonly found in master planned communities, condos, or townhome communities but can exist in any neighborhood. By purchasing a property in an HOA community, you’re automatically a member in most cases, and must pay association dues. There is such a thing as a voluntary HOA, but most are mandatory. Each HOA has a set of rules called Covenants, Conditions, and Restrictions (CC&Rs). These CC&Rs are filed with the local county for each lot, creating a deed restriction that stays with the property even as it changes hands.
Homeowners Associations are run by a board of directors made up of community elected homeowners in the community. HOA rules are enforced by a board, or by a management company hired by the board. The board makes decisions about how to spend HOA funds and the overall operations of the amenities owned by the community.
What are the benefits of living in an HOA?
HOAs have become quite popular in the north Texas suburbs because they offer attractive amenities for homeowners to use, without the maintenance. Amenities like resort style swimming pools, water slides, parks & playgrounds, sports facilities, and fitness centers can be found in many of the hottest new communities. The HOA dues paid for by homeowners will pay for the upkeep and insurance for those amenities. They may also pay for events or holiday fireworks displays. However, not all HOAs offer amenities like these. Some just include a pretty sign with maintained landscaping, while others have no common areas at all. The more an HOA offers, typically the more home buyers can expect to pay in annual dues.
One of the other major advantages of owning a home in an HOA is that they require homeowners in the community to maintain a certain look and standard of care. Enforceable community standards often prohibit overgrown lawns, faded or peeling paint, junk stored visibly in front or side lawns, etc. This helps keep the community looking nice, and also helps maintain property values. Ever had a neighbor that wouldn’t mow their lawn or one that painted their house a wild color? HOAs can set limits on the appearance and enforce upkeep rules.
What are the disadvantages of living in an HOA?
While the above advantages are great, there are some downsides to consider, too. HOAs cannot easily be disbanded, and it takes a majority of the community to approve any changes to the rule, which is difficult to achieve.
Some homeowners don’t like having so many rules governing a property that they own, and don’t like asking permission to make changes. Owners that don’t know the rules may find themselves in a tough or even expensive situation if they make an improvement without going through the proper channels for approval, resulting in fines or being required to return the property to it’s prior condition.
Another downside can be paying dues. HOA dues are usually assessed annually, with payments being due at specific intervals. There is no “paying off” your HOA dues, like you would when you finish paying on your mortgage loan. Dues can be increased, with approval of the board, too.
What to do when you’re considering a home in an HOA:
Know what you’d like to do in and around your home. Of course living there is probably the main reason you’re purchasing, but consider some other potential uses you might have down the line. Do you intend to start a home-based business? Are you planning to have a lot of pets or breed animals? Would you want to add on to the house or build any structures in the yard, including sports equipment? Would you want to install a swimming pool? Do you ever intend to rent your home, either fully or as a short-term while you’re away? Having a clear idea of your intended uses for your future home can help you look for any restrictions up front, before entering into a purchase contract. It also allows you to opt out of a contract if the HOA would restrict any of your intended uses. Most HOA disputes are a result of misunderstanding the rules, or not reading them before purchasing.
After purchasing, get involved! Be sure to attend meetings and read announcements so that you’re not caught off guard by any changes, and can have a say in how funds are spent.
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Christy grew up in West Texas and is a graduate of Texas Tech University with a bachelor’s degree in Family Studies. She and her family have been residents of The Colony, TX for 3 years and are very....