Things to Know About Homeowners Associations

Many residential communities have a homeowner’s association (HOA) structure to help maintain a clean and cohesive atmosphere in the neighborhood. Also, when you buy a condominium, townhouse, or single-family home within “a planned development” you may also encounter the HOA structure.

KEY TAKEAWAYS

  • Many condos, co-ops, and even some neighborhoods have homeowner’s associations (HOAs) made up of member residents.
  • HOA members are elected from among the residents and serve to maintain grounds, master insurance, community utilities, as well as the overall finances of the building complex or community.
  • Most HOAs will require all unit owners to pay a monthly maintenance charge and may also demand special one-time assessments to cover large community expenses.
  • The HOA’s bylaws will spell out which responsibilities are the associations and which are the unit owners’.

    Fees Range Widely

    A Trulia study which used American Community Survey records, found monthly HOA fees averaged $331 a month in 2015. Averages ranged from a low of $218 month in Warren, Mich., to a high of $571 in New York City. Trulia found dues to be generally higher in older buildings and complexes with more units overall.

     What You Get Varies, Too

    When you buy a home in a managed community, you’re actually buying a bundle of legal obligations and entitlements in addition to physical living space, says John Manning, managing broker at RE/MAX on Market in Seattle. The precise rights, services, and amenities for which the HOA is responsible may range as widely as the fees being charged. “A gated community may have gate maintenance as the only agreement between homeowners, or there may be an HOA in place with a legal authority to manage much more,” he says.

    Additional Fees May Apply

    An HOA may adopt one of several approaches to financial management. These choices especially affect how it funds unexpected expenses and such capital investments as replacing an HVAC system.

    Conflict Management

    As in any community, disagreements arise within a planned development, sometimes over certain residents bending or breaking the rules. Before you buy, explore how rules are set and enforced and what penalties are imposed against rule-breakers.

    Compliance with the HOA

    Don’t rely on being properly alerted to any lingering issues between the association and the current owner of a house that interests you. Failure to ask about these problems in a timely way could result in you inheriting them when you take possession of the property.

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