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Owning a home can come with its share of challenges. Homeowners associations (HOAs) can help manage some of these issues but come with their own set of considerations.
HOAs are governing bodies within common-interest communities, such as planned neighborhoods and condo buildings. Run and funded by residents, they hold regular meetings, manage budgets, and enforce rules to maintain community standards.
When they function well, HOAs can boost property values by keeping neighborhoods attractive. However, poor management or high fees can make them a hassle. Here are two key things to know before buying a home in an HOA neighborhood:
1. You’ll Have to Pay Fees
HOA members must pay dues, which cover maintenance and amenities like parks, pools, and clubhouses. These fees vary based on location and amenities. For example, a New York high-rise with a gym may have higher fees than a suburban house. Fees can also increase if more funds are needed.
If fees aren’t paid, HOAs can take actions ranging from warnings to placing liens on homes. Despite collecting dues, many HOAs are underfunded. Ask your real estate agent for the HOA’s financial report to understand the financial health.
Before buying, find out:
- Fee amounts and frequency.
- What the fees cover.
- If there’s a reserve fund for emergencies.
- If the amenities are worth the fees to you.
2. You’ll Have to Follow Rules
HOA rules, known as covenants, conditions, and restrictions (CC&Rs), typically focus on property exteriors and communal living aspects. For instance, they might dictate lawn maintenance, pet restrictions, or noise levels.
These rules can be beneficial for maintaining order but may restrict personal choices, like installing solar panels or painting your door a bright color. Non-compliance can lead to fines or legal action.
Before buying, find out:
- The specific rules.
- How rules are enforced.
- Consequences of rule violations.
Consider if you can live with these rules and ask your agent if you can attend an HOA meeting or review meeting minutes to gauge community dynamics.
Living in an HOA community means adhering to certain rules and paying fees, which can provide benefits like maintained common areas and enhanced security. However, HOAs aren’t for everyone, so weigh these factors carefully before deciding.
This article originally appeared on NerdWallet.
