A Homeowners’ Association (HOA) is an organization that oversees a group of homes by setting and enforcing rules, resticitions and caveats as well as maintaining the community. HOAs are most common in planned communities and condominium developments.
Pros
Property Value
Overall quality and nicer neighborhoods are big influencers when it comes to homeowners deciding to purchase a property within an HOA. The rules, regulations and oversight that an HOA provides mean higher standards for homes and neighborhoods. HOAs also help homes maintain their value as neighborhoods are held to a certain standard.
Amenities
This varies widely depending on the specific neighborhood, but amenities can include pools, clubhouses, tennis courts, walking trails, parks, gyms and more. Purchasing a home within an HOA will grant access to shared amenities without the hassle of personal maintenance.
Conflict Resolution
Unruly neighbors can cause trouble anywhere, but a neighborhood with an HOA will help provide a structure for dealing with neighborhood disputes. Barking dogs and late-night parties are less of a concern with an HOA to help resolve any issues. Neighbors will need to comply or they may face penalties.
Insurance
HOAs typically are required to have a master insurance policy in place, which means that the HOA dues include this insurance coverage in place, which protects the homeowner against major claims, such as fire as well as offfering flood protection.
Cons
Fees
The most visible disadvantage to living in a neighborhood with an HOA are the fees. The HOA dues are a monthly due paid to the association directly. More amenities generally mean higher dues. The fees pay for the amenities, activities and administration performed by the HOA. They are also not tax deductible.
Limitations
HOAs may also have restrictions on the percentage of homes that must be homeowner occupied. In other words, some neighborhoods won’t allow homeowners to rent out their home to other tenants.
Rules and Regulations
The standards an HOA sets to keep a community nice can also be restrictive. Many neighborhoods have specific exterior landscape designs and color palettes, regulate how many vehicles may be parked on a property and where, as well as the amount of time a trash bin may be left out. Homeowners must meet their standards or can be subject to fines.
Before you buy your next home, carefully consider whether you would like to live in a neighborhood with or without a HOA. You can contact us with any questions you may have at (760) 930-0569 and one of our loan officers will assist you.
