What You Need to Know About Home Owner Associations

As a Realtor® I have developed some pretty strong feelings about these organizations and have probably come into contact with them on a more frequent basis than the average homeowner. Hopefully some of these insights will help when you are purchasing your next home.

The Basics

According to Community Association Institute (CAI) about one in six Americans lives in an association-managed community, and an estimated four out of five houses built since the late 1990s are governed by a homeowners association.

Back when sub-division was still a new word in our vocabulary the dreaded HOA was established. The primary purpose of a homeowners association is to manage common areas such as roads, parks and pools. Homeowners are obligated to pay dues and live by the associations rule book.

These regulations vary widely but typically cover such things as the color of your house, the kinds of trees you may plant, where you can park your car and in some instances whether you can rent out your home.

The Pro's and Con's

Proponents of this sub-governmental organization will tell you that because everyone is required to follow the rules it helps a neighborhood maintain its property values and keeps one person's property from having a negative impact on his or her neighbors. There is also an added advantage for some to have a third party to rely on when they want to complain about one of their neighbors.

On the other side of the fence there are people who take exception to others excerpting control on what they do with their property. In some neighborhoods, homeowners have faced fines for such offenses as flying the wrong size flag, decorating for unapproved holidays or putting the wrong color curtains in their windows. Let's also not forget what I get the most notices for; weeds being to long.

Picking Your Poison

Knowing about your HOA before you purchase your home can be paramount in determining whether you are going to be happy or miserable in your new home. Here are a few general observations when it comes to these organizations.

1.The size of the sub-division has little nothing to do with how reasonable the association is going to be.
2.Newer sub-divisions usually are stricter than older ones who are more established.
3.Read through the rules and regulations carefully before you buy.
4.Talk to others in the sub-division.
5.If idea of getting permission prior to doing something to your property is repulsive then buy a home without a HOA.
6.Investigate the financial reserves of the association and if any upcoming liens are forthcoming.
7.IMPORTANT: Time permitting, attend a meeting. These are usually open to all members and you will most likely be welcome. This will tell you a lot about what you are going to be dealing with.

Some of the above items can be done after you are in contract on the home. Most states have provisions for you to investigate the association built into the residential real estate contract. You should be given time to review the association information and have the option cancel the contract should you find the association, and or their rules unacceptable.

Conclusion

In their purest sense these associations serve a worthwhile purpose as we all want the community we live in to be a safe environment and maintain its value. As in everything there are well managed associations that prove almost transparent to the homeowner. On the other hand it's the other ones we seem to hear about the most. It's a pure case of 'Buyer Beware' you will need to identify what it is you want and how you want to live, and if a HOA is part of that scenario.