The Pros & Cons of Buying in an HOA Community

12 Aug The Pros & Cons of Buying in an HOA Community

Homebuyers have more options when purchasing a home than ever before, and there’s no doubt that both the Texas and Colorado housing markets have excellent choices for residential communities. Whether you’re looking for your first home or fifth, there are pros and cons to living to own in a community run by a homeowners association. 

Over 25% of the US population lives in HOA-planned communities, condominium communities, and housing cooperatives. Many residents have strong feelings about living in a homeowners association. Most are  positive, or they wouldn’t have decided to move there. Before  taking the plunge, however, make sure you have all the facts because membership is not optional once you do. Below we’ll review what buyers need to take into consideration before purchasing. 

What is an HOA?

For those that may not be familiar, a homeowners association, or HOA, is an organization that oversees a group of homes, creates and enforces rules, and facilitates the necessary maintenance of the common property. The enforcement of the covenants, conditions, and restrictions, known as CC&Rs, is the responsibility of the HOA. 

The HOA charges its residents applicable monthly fees for use in managing the property. The association will likely partner with a property management company to determine a budget, maintain common areas, and meet guidelines. They will handle budgetary items and also handle resident disputes. 

The Pros of an HOA

If you’re an active home buyer, chances are there are HOA options in your town or city. There are significant benefits that come with purchasing into a homeowners association. The first and maybe most popular is the low-maintenance lifestyle it affords residents. Owners may have a personal space like a patio or balcony to maintain, but the general landscape and all hardscape areas are often fully maintained by the association. . In many HOA’s, significant expenses are included in the monthly dues such as snow removal, trash collection, pest control, and maintaining building exteriors. Certain utilities are also commonly part of HOA fees.

Another huge draw of living in a community is the access to various amenities. Things like a gym, tennis and basketball courts, pool, clubhouse, and playground are popular conveniences offered by many HOA’s. With people living busier lives and many working remotely, having certain luxuries right at your doorstep can save time and money. In addition, many of these common areas provide an effortless way for residents to meet and form relationships.

Another big perk is the options for socializing. Most communities will have a social committee that fills out a social calendar with seasonal and annual events for residents to look forward to each year. In part from these efforts, HOA’s provide a direct conduit for making friends for residents who move in from outside the area. Finding that sense of “community” is very doable when your choices exist right outside your front door. Plus, you’re surrounded by like-minded neighbors that all chose to purchase their home for very similar reasons. If there is an issue with a neighbor, the board can act as a mediator to settle the dispute. 

Finally, peace of mind can come with owning in a community, knowing that the value of your home is being protected. One of the core objectives for HOA’s is to preserve, and grow, property values for homeowners. With a home being the most significant purchase many will make, having a team of board members and property managers looking out for it is a great benefit.

The Cons of an HOA

First off, there are fees associated with living in an HOA. Depending on the level of services and amenities that are covered, fees can vary quite a bit. It’s good to know how often, and by how much, costs have increased over the last few years. In addition to the standard monthly fee, there will inevitably be an assessment for some needed repairs or facade changes at some point. These shouldn’t happen very often, but it’s something to remember.

With an HOA, there are oftentimes a long list of rules. These will be laid out in the governing documents and include various property and parking restrictions, noise rules, allowed pets, and rental guidelines. The regulations in place will also limit the control homeowners have over the personalization of their homes. From holiday decorations to plantings and color choices, the HOA controls many of these decisions. If you’re the type of person that wants to put a haunted house in their front yard on Halloween, an HOA probably isn’t for you. Things like architectural changes to your home and renting your home (if allowed) will have structured processes to go through. Those processes can seem daunting but are in place to keep things running per the bylaws and rules. Keep in mind there is more conformity than not when you belong to an HOA.

Lastly, although an HOA board is organized and ethical in most cases, there have been times when neither has been the case. A board consists of volunteers, and if funds are mismanaged or, in rare cases, there is some fraud or embezzlement, the whole community could suffer. As a resident, you still have to rely on the selected board members and the property management team to uphold their duties and responsibilities. If they aren’t doing their part, finding a solution can be an uphill battle, which may require legal measures.

Deciding if an HOA is right for you

When selecting a property, do a complete walkthrough of the amenities and the grounds and note the level of maintenance being done. If you encounter any neighbors on your tour of the home or property, ask them a few questions about the quality of the board and property management team. Check the website and social media of the community to learn more about the social aspects. Find out exactly what’s covered in your dues each month and get an idea of how much they will increase based on historical prices. Know the schedule of fees, what penalties are, and results from nonpayment, the heaviest of which could be a lien on your home.

Knowing some positives and negatives to HOA living, there are a few other things to consider before purchasing. First off, make sure and review the CC&R’s; know the rules, and be sure you’re willing to live within them. Next, ask if the community is solvent and how healthy the reserve fund is (assuming they have one). We recommend you inquire how often the board meets and request to see the prior board meeting minutes. Ask about the management company or team and ensure they are reputable and serve other communities with similar standards. Finally, you want to understand how responsive they are to homeowners when issues arise and how they treat residents. 

If you decide to purchase into a homeowners association, the best way to know what’s going on is to become involved in the process. Volunteer on a committee, attend board meetings, and maybe even run for a vacant board seat. An HOA should always be representing the owners’ best interest. Remember, the board members are busy people who often care about the community and want it to thrive. With help from a valued property management team, homeownership in a planned community can be rewarding, less stressful, and an excellent way to meet and make friends.