What Do HOAs do?!

What Do HOAs do?! - IRG Corporation

 

By definition the Homeowners Association “is a private association formed by a real estate developer for the purpose of marketing, managing, and selling homes and lots in a residential subdivision.”

Although their main goal is around marketing and selling the properties, a Homeowners Association a.k.a HOA also creates a bunch of restrictions in the area in order to preserve the properties in the best conditions possible for future sellings and the overall view of the neighborhood itself, but don’t be scared of it at all! It can also be a beneficial thing for your neighborhood! It also creates a good place to raise a family, because they tend to be very selective of the people they let in! The payments of it are not going anywhere but the overall well being of the neighborhood, keeping common areas clean, and completely safe for your kids to play at!

A HOA can be a very scary concept for anyone, but if you educate yourself in the subject you’ll understand that while yes, they have a bunch of rules you have to live by, they also have the neighborhood best interest in mind, so get to know what goes on in a HOA and then make the decision!

First of all, do you know who is on the board of directors of a HOA? Well, usually it starts out being only the developers, but after a certain number of lots is sold it tends to get transfered to some selected homeowners who after that continue to run the association itself completely. The membership to this association is a requirement to purchase a home in the area it stands, its non-negotiable and written in the purchasing contract, once someone leaves the community by selling the property, the membership gets cancelled and transfered to the new owner.

Now that we know who runs the association and how the membership works, its time to know exactly what can be found within it! As I said before, it maintains the common areas and keeps the neighborhood clean and concise with everyone following the rules, and those rules are called convenants, conditions and restrictions, and those determine a number of things, from the color of your house to the type and size of pets you’re allowed to have, from your landscaping to window coverings for windows facing the streets, but you can ask for permition to be granted the variance, but those are not common.

Before you jump into buying a place with a HOA know what the CC&Rs are, and see if they are convenient for you, the homeowner, while also considering the fact that the upkeeping of this association is not for free, it usually comes with a fee not over $400, used to mantain the common areas and unexpected repairs, do keep in mind if you fail to pay the monthly fee th association is in the liberty to put a lien on the property, while they can also put a penalty on you for breaking one of the CC&Rs.

Not all is as bad as it sounds, and it varies from place to place, some being more restrictive than others, but there are many benefits, one of them being the fact that your home is subjected to rules the same to everyone else, so the neighborhoods tend to be in pretty good shape meaning you can get a significant amount of money for it back if you so wish to sell it back again, and the upkeep of the common areas guarantees you the usage of them to your hearts desire, and depending of the zone some HOAs tend to cover the cost of trash collection and snow removal from the place.

As I said before, a HOA is not the beginning of all evil, while yes, some are more restrictive than others, you can always benefit from them in the long run, so research deeply about the area, the CC&Rs, and see if it fits what you and your family might need, or in another case, if the numbers make sense for a future investment in the area!

If you want more information, on the subject, check the links bellow, those will help you out finding more and more details about it to guide you through your research process!

Sources:

http://www.investopedia.com/terms/h/hoa.asp

http://www.investopedia.com/articles/mortgages-real-estate/08/homeowners-associations-tips.asp

https://en.wikipedia.org/wiki/Homeowner_association

 

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IRGCorporation Community Manager

Written by

Alice Dominguez

 

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