There are so many things to consider when purchasing a home that many forget about homeowners’ associations. A homeowners’ association will ask you to pay either a monthly or annual fee used for upkeep of common areas. An HOA sets rules that all residents must follow called covenants, conditions and restrictions (CC&Rs). Some rules in place may be the color of your home, exterior landscaping, type of pets permitted and so on. If you want to do something different from what rules allow you must contact the HOA to grant you a variance, if accepted. Besides the restrictions set by city ordinances, your HOA will have its own on what you can do to your property. Before you purchase a home, read the information below on how HOAs work.
- Learn the rules
You may find the HOA’s current rules online or contact your realtor. Read the rules thoroughly paying close attention to fines and if property can be foreclosed for nonpayment of HOA dues. You must understand the process needed to have rules changed or added in the event of an issue.
- Be aware on what the fees are
Fees vary with the different HOA’s it is important to know them and how it will impact you financially. Questions you need to ask should include how increases are set, occurrences, if there monthly and yearly dues and what is covered. If there are recreational facilities know you will have to pay for them even if you do not use them.
- Make sure your new home is not out of compliance
Do your research to find out if the home is currently out of compliance and if you would need to make these changes.
- Environmentally friendly
Confirm with the HOA if you are able to use environmentally safe products. Your HOA can dictate to you what fertilizers, pesticides, sprinkler systems and other forms of lawn care you are allowed to use. If gardening is a hobby of yours, an HOA can limit your garden size, ban compost piles and prevent the installation of solar panels.
- Consider your temperament
HOA rules can interfere with you turning the house into your home by customizing it to suit your needs. If this is a problem, consider living in a community without an HOA.
- Sit in on a homeowners’ associations meeting
Gaining this information can tell you if there were any conflicts and the process the HOA uses to resolve them. Talk to the HOA president and some members to have a sense for whether you want these individuals making decisions about your property. And of course talk to current residents who have lived there for a few years to get their input.
For condo or townhouse purchases
Find out if the HOA has purchased catastrophe insurance on the building. This is important if you are thinking of purchasing in an area prone to floods, earthquakes, blizzards, fires, tornadoes, hurricanes or any other potential natural disaster. If your property has an under-managed HOA, residents take turn serving as president or appointing someone. This can be an issue as many residents may not care in maintaining the building, making repairs, hearing resident grievances or being on the board. It would also be a good opportunity to find out if you can rent out your property. All residents are responsible for maintaining common areas such as landscaping, elevators, swimming pools, fitness rooms, and security gates. HOA fees maintain the quality of life for the residents and protect property values for all owners.