What is a HOA?
Acronyms are a favorite part of language in the modern world. If you are an avid texter or tweeter you may be racking your brain for what HOA means. No, it's not commonly used in day to day conversations outside of the real estate world...
A HOA is a Home Owners Association. If you have never been a part of one of these, or have never owned a home, you may be thinking "What? I have to be in an association to own a home?"
Not necessarily. There are plenty of properties that you can buy that are not a part of an association, for example, most single family homes are usually independent and free of an association. An exception to this may be a gated community or special development that has certain rules in place for general appearance of the neighborhood and care of common elements in the neighborhood. (Don't worry, we'll get to common elements)
On the flip side of that, there are many living spaces that do have an association. The most common of these would most likely be a condo building or a townhouse community. These are generally communities where there are spaces that are shared by the tenants of the community but still have ownership of their own property.
Still lost? That's okay! Let us break it down a little more in what a HOA does and the benefits of being a part of one.
Realtor.com simply define it as: "HOAs help ensure that your community looks its best and functions smoothly...". Additionally, "maintaining the common areas, homeowners associations are also responsible for seeing that its community members follow certain rules. Homeowners receive a copy of these rules, knowns as “covenants, conditions, and restrictions” (CC&Rs)".
So, other than the upkeep and running of a community, what does it mean to be a part of an HOA? Home Owner Associations have a board that is made up of community members, generally elected by the other homeowners in the community. If you do live in an HOA it can be extremely beneficial to attend community meetings as you will have the ability to hear what the plans are for the HOA and have a say in the community.
Does is cost any money? There are fees associated with an HOA generally. The fees can be charged monthly, quarterly, or yearly. The fee is an important factor to keep in mind when you are planning on purchasing a property in a HOA. Make sure to talk to your lender about your budget for the home cost with a HOA fee.
The fees from the HOA will go to cover the costs of any common elements or the upkeep of the community as defined in the resale documents that the association provides. A common element in a community may be an event space, pool, patios/decks used by all, or outdoor maintenance. The items that are determined as a common element, meaning that all community members have access and a share to them, are also defined the in the documents provided by the HOA when you go to purchase.
Often the fees associated with the HOA will cover the basic monthly expenses of upkeep for the community, but there will also be some that will go into a general reserve for the community. When there's something big that has to be done, for example, residing the building, it will be paid by the reserves so you won't feel the direct impact!
What other benefits are there to an HOA?
One of the top benefits to living in a community with a HOA is that it can be low maintenance. Depending on the community, water/sewer, trash removal, and even lawn and outside maintenance can be covered in your HOA dues. This means less time worrying about taking care of your lawn or shoveling and more time actually relaxing in the outdoors, or sleeping in an extra 10 minutes in the winter without worrying about shoveling yourself out of the driveway.
Overall appearance of the community is generally a top priority to the association. Some rules may limit what can be kept in driveways, what sort of fences can be in the neighborhood, or what you can hang from your deck. This is great if you care about the overall look of your neighborhood.
Do you have neighbors that aren't following the association rules? Management is generally a part of an association. Save your relationship with your neighbors and notify the management company or the board about an issue. The will approach the issue for you and you can go about your day.
HOA's can be a fabulous option for those that are looking for any of these options. Always make sure that you ask your realtor any questions you have about a HOA on a property and carefully review the documents that are provided if you make an offer to purchase. The documents provided will clearly state everything that is covered and what is expected in your new neighborhood.
Do you still have questions on HOA's or are interested in finding a home that has one? Let us know!