What is an HOA?

HOA is an abbreviation for Home Owners Association, but has also been used to describe any covenant-controlled community. These include single-family neighborhoods, condominium and townhome associations, voluntary improvement associations, and property owner associations. Covenants and restrictions are the rules that govern everything from house design to parking regulations and most of everything in between including landscaping, paint colors, fencing types and roofing materials.

Of the people who buy a home, approximately 25 percent buy in a development where there is an HOA. No home is perfect, but if you are buying a home in a community where there is an HOA, you need to look beyond just the minor repairs and upgrades the home needs. If you are looking to buy a home in a community with an HOA, you need to be aware of the all the rules, regulations, guidelines and costs and the consequences if you do not adhere to them.

Because of the numerous negative experiences, many people will no longer consider buying into a covenant-controlled neighborhood. While there are positive points to living in a community with an HOA, one cannot express the importance of researching the HOA and reading AND understanding all the governing documents before buying a property in the community. If you choose to buy into a community where there is an HOA, it should be a personal choice and preference. There should not be surprises!

There are using a ton of complaints send to the division of real estate each year. The complaints include how elections of the board of directors are handled, how meetings are conducted, how complaints and conflicts of interest are dealt with, as well as the fines, liens and foreclosure issues that arise when the rules are not followed and the fees are not paid.

We suggest you follow these tips if you are considering buying into a neighborhood governed by an HOA:

1. Read the Board of Director's meeting minutes to help you uncover potential assessments of other property or financial issues. If there are upgrades planned to the community, will your assessments be raised to cover the cost?

2. Read the CC&Rs to understand the property restrictions. For example, many communities have restrictions on how many units in the neighbor can be rental units. If you are looking to buy a property as a rental unit, be sure you will be able to rent the property!

3. Read all HOA documents completely! If you own a large truck, be sure you are not buying a unit that has parking space limited to compact cars only. If you think you might want to change anything about your property, know what the rules, regulations and guidelines are. For instance, if you want to put up a 6-foot privacy fence around your yard, be sure the type of fencing you want to put up is allowable. If you think you might want to put on an addition onto your home, know if you can and what the parameters and restrictions are. If you do not like the color of the exterior paint on the house, make sure the color of paint you want is an allowable color!

4. Know what the HOA fees are and if they can or will increases! If you are buying in a neighborhood because the price is low and affordable, but the community has an HOA, find out what the HOA fees are and make sure they are affordable. Will your HOA fees go up if major repairs or upgrades are needed? For instance, if capital items such as a roof have to be replaced, will your HOA fees be increased to cover the cost? In some cases, people have ended up paying nearly as much for HOA fees as they do their mortgage payment.

5. Talk to people in the neighborhood. Are they happy with the HOA? Do they think the fees compare to the benefits. Are they satisfied with how the association handles the community and any issues?

HOAs can be a benefit to real estate ownership. They are intended to provide continuity and standards for the neighbor, but they can be complicated as well. You need to understand the risks of the common interest of development ownership, but you cannot do this without reading and understanding all of the HOA documents and CC & Rs before you close on the property.

If you are in the market to buy a home and you are not sure about the different communities that have Home Owners Associations, working with an experienced and knowledgeable real estate agent can help remove some of the mystery and surprises. If you are looking for a community that has the covenants and restrictions because you want that type of continuity in the neighborhood and for your family, your agent will be able to search homes for you that meet your needs. Your real estate agent can also help you obtain the documentation you need so you can make the decision that is best for you and your family. If you prefer to live in a neighborhood not governed by an HOA, your agent can help you find a home in an area where there are no HOAs.

Whatever your needs are, Pink Realty can help. They can help you find the answers you need and they will find you the right home in the best neighborhood for you. Now is the time to buy, so if you want to find the right home for the right price in the right neighborhood and have an agent that will be there for you from start to close, call Pink!