When searching for a new home, prospective buyers often consider various costs associated with homeownership, such as insurance, utilities, and taxes. However, one aspect that may not immediately come to mind is whether the property is part of a neighborhood governed by a Homeowners’ Association (HOA). Understanding what an HOA is, its functions, and its impact on homeowners is crucial for making an informed decision.
What is an HOA?
A Homeowners’ Association, commonly known as an HOA, is an organization that oversees and maintains the common areas and amenities of a neighborhood or property complex. These associations are particularly common in neighborhoods that offer shared amenities like community pools, gated access, playgrounds, and tennis courts. An HOA is typically managed by a volunteer board comprised of homeowners within the neighborhood. These boards may also establish committees to coordinate events, review property modification requests, and enforce the community’s covenants, conditions, and restrictions (CC&Rs).
Understanding the Rules
Each HOA operates under a unique set of CC&Rs that outline the rules and regulations for the neighborhood. Common rules include guidelines on property appearance and maintenance, such as house paint colors and lawn care standards. Some HOAs also have restrictions on street parking, or where residents can store boats and RVs. Additionally, they may organize neighborhood watch programs and community events.
When considering a home in an HOA-governed community, it’s essential to obtain a copy of these CC&Rs to understand what is allowed and prohibited. Many HOAs maintain a website or social media page where potential buyers can learn more about the community. For example, an HOA might prohibit parking cars in yards, or require approval for significant changes like repainting a house, altering landscaping, or adding structures. While these rules can seem restrictive, they aim to preserve property values and the neighborhood’s overall aesthetic.
How are HOAs Funded?
HOAs typically require residents to pay annual dues, which vary based on the neighborhood’s size and amenities. These dues fund the maintenance of common areas such as entrances, playgrounds, pools, and sometimes roads, sidewalks, and street lighting in gated communities. Some HOAs also hire property management companies to handle dues collection and maintenance issues.
In new developments, dues might be minimal initially as there may be fewer amenities to maintain. Developers often cover some costs during the development phase, but as the neighborhood nears completion and the HOA transitions to a resident-managed board, the true costs of running the HOA become apparent.
Timely payment of dues is important as late fees and interest can accrue, and in extreme cases, the HOA can place a lien on the property or even foreclose for nonpayment.
After the Closing
Once you’ve closed on your new home, contacting the HOA should be a priority. Providing your contact information ensures you receive important updates and can learn about upcoming neighborhood events and involvement opportunities. HOAs rely on resident participation to function effectively.
Attending neighborhood events, such as ice cream socials, parades, trick-or-treating, and holiday parties, can help you meet neighbors and build community relationships. Remember, the volunteers serving on the HOA are your neighbors, working towards the collective good of the community. A well-maintained neighborhood benefits everyone, enhancing property values and creating a pleasant living environment.
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