How Do Homeowner’s Associations Work? The Complete Guide
Have you ever driven through a certain neighborhood and noticed how all of the homes and condos in the area are picture-perfect? You might be curious how it’s possible for a whole neighborhood to look that way. The neighborhood you’re driving through may be full of meticulous homeowners, or it could be part of a homeowner’s association.
If you’re new to the world of real estate, or if you grew up in an area that doesn’t have a lot of homeowner’s associations, then you might be wondering what they are and how they work. Read on to find out everything you need to know!
What Is a Homeowner’s Association?
Homeowner’s associations, or HOAs, are organizations of homeowners within a particular neighborhood that develops and enforces rules for the residents. They also collect HOA fees that are used to help run the association and to pay for community-wide amenities like tennis courts and swimming pools.
HOA fees are also used to provide services to residents. This can include regular landscaping services and maintenance of common areas like roads, sidewalks, and community parks.
There can be many different HOAs within a single city. One city that is notorious for its numerous HOAs is Irvine, California. Irvine is a city of 273,000+ people, but it is broken down into master-planned communities, nearly all of which have their own HOA. Some are more restrictive than others.
HOAs can show up anywhere, but you’re more likely to find HOAs in resort communities, master-planned communities, and condominium buildings.
Can You Opt Out?
If you’ve never owned a home that is part of an HOA, you might be wondering if can simply opt out of an HOA when you purchase your home. Unfortunately, most HOAs do not work that way.
If you buy a home within an HOA community, then you have to join. In fact, joining the HOA will be a condition of the sale of the home. You will begin paying your monthly dues as soon as you close on your new home, and that is when you will be able to benefit from the services and amenities offered by the HOA.
In rare instances, membership within an HOA may be optional. If you choose to opt out, then you need to remember that you won’t be able to benefit from any of the services or amenities.
Homeowner’s Associations Fees and Dues
In order to become a member of an HOA, you have to agree to pay your membership fees and dues. The amount of these fees and dues varies widely. Smaller communities with HOAs may only charge residents monthly fees of $50 or $100 dollars.
Well-developed HOAs and HOAs in luxury communities are much more pricey. Those HOAs can cost you hundreds of dollars a month, or even more. Luxury condo buildings that are packed with amenities are notorious for charging their residents a pretty penny for their services.
If you fail to pay your HOA dues, then you will find yourself in some serious hot water. HOAs have the ability to do everything from filing suit against you for the dues you owe to causing you to be evicted from your home for failure to pay. They can do this even if you are current on your mortgage payments.
Maintenance and Upkeep Rules
One of the greatest perks of HOAs is that they frequently have rules that ensure that all of the homes in your community maintain their curb appeal. Some HOAs have more restrictive bylaws than others, however.
For example, your HOA can dictate the colors that you can use to paint your home. They can even be as specific as naming specific paint colors by specific paint manufacturers. If you want to paint your house a different color, then you must ask for permission, and it’s likely that you’ll be turned down.
Even small things like the color of your window coverings or the type of door you have on your patio can be regulated by the HOA. Failure to abide by the rules will cost you a pretty penny. Not only will you be fined by the HOA, but you’ll be forced to fix the issue ASAP.
For these reasons, it’s important to read the bylaws of the HOA if you’re thinking of buying a house within that particular HOA. If you don’t think you can stick to them, move on.
You aren’t the only one who has responsibilities within an HOA. The HOA board also has numerous responsibilities. They are in charge of performing all of the maintenance on common areas and amenities.
They are also charged with enforcing the rules of the HOA. If they notice that someone is out of compliance with the bylaws, then they must issue the violation and see that the problem is fixed. This ensures that everyone is fulfilling their responsibilities within the community.
Who runs an HOA?
Most are run by a board of directors comprised of community members. The board members may be volunteers, or they might be an elected position. Some HOAs are run by a management company instead of a board, or they may be a combination of both.
HOAs must have regular meetings that residents can attend to address any complaints or relevant issues.
Are You Thinking About Buying an HOA Home?
If there’s one big takeaway from this discussion, it’s that homeowner’s associations are controversial, and people either love them or hate them. The great thing about them is that they protect property values by keeping the community looking great and providing community amenities. The downside is that they can have restrictive rules that limit your ability to modify your home, and they are pretty pricey.
If you’re thinking about living in a homeowner’s association, it’s important to weigh the pros and cons of that association before putting pen to paper on an offer.
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