March 11, 2021
Homeowners Association 101
You’ve found the perfect house, but you find out that it is located within a homeowners association-governed community. What does that mean?
A homeowner association, or HOA, is an organization that makes and enforces rules, which are decided by the HOA board members. If you buy a home in an HOA-regulated neighborhood, you’re automatically a member of that association. Statistically speaking, one out of every five houses is in an HOA community, so it’s not entirely uncommon to find yourself a part of one.
The most important thing to know about your prospective HOA is what the fees are. HOA fees can range widely, depending on the amenities, the number of homes, and the neighborhood’s relative property value. The average monthly HOA fee is $331. HOA fees can rise and fall over time, so we recommend that you look at the fine print to see if there is a set dollar amount that fees are allowed to waver. It’s also important to note that property taxes are an entirely separate entity from HOA fees and are not included in your monthly bill.
All homeowners associations have a CC&R, which is a Document of Covenants, Conditions, and Restrictions. That’s all just fancy-talk for The Rules. HOAs can restrict more than you may have expected, from the color of your door to the type of pets you can have. Some HOAs will even outline the height allowances for your fences and grass. The rules, or covenants, of an HOA intend to keep the neighborhood looking pristine and ensure no “odd ducks” can lower property values.
With rules come consequences, and homeowners associations have a few punishment methods for rule-breakers—the most common of which is fines. If the penalty goes unpaid or you reach a certain amount of strikes, HOAs withhold the right to sue, evict, or even potentially foreclose your home.
The most significant benefits of living in an HOA owned community are the amenities. Some neighborhoods may feature a pool, gym, covered parking, or a dog park. The upkeep of these facilities is paid for with the HOA fees. With that said, it’s essential to dig into the rules to see if any bylaws restrict usage of the amenities.