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Here’s What Your Homeowner’s Association Doesn’t Want To Tell You
Here are 5 pros and 5 cons for living under a Homeowners Association you may not have considered yet.
If you’ve been house hunting, you’ve likely run into at least a couple properties that are controlled by a homeowner’s association (HOA). As of 2018, nearly one quarter of the U.S. population lived in an HOA community, and it’s estimated that HOAs govern nearly 80% of homes being built in new subdivisions. If you aren’t familiar with the term, a Homeowners Association is a governing organization made up of property owners in a condo building, subdivision, or planned community. Typically, board members are elected to advocate for the best interests of the community as a whole and ensure all HOA members follow the rules and restrictions set forth by the community.
When you are first exploring a new neighborhood, the Homeowner’s Association will want to present itself and the community in the best possible light. Before you decide to call this HOA community your home, make sure you know exactly what you are signing up for, where your HOA fees will go, and what hidden rules and restrictions are in place, as each Homeowners Association will function a bit differently. However, here are 5 unexpected pros and cons of living under the governance of an HOA that will apply to most communities.
Pros:
1.) Living in an HOA community may increase the value of your home, leading to a greater return on investment when it’s time to sell. Research shows that single-family homes in HOAs tend to sell for 4% more when compared to similar homes that are not governed by an HOA. This is because the HOA will ensure the homes and common areas in the neighborhood receive proper maintenance and updates when necessary in order to keep the community as a whole looking nice and functioning correctly. The HOA will help maintain a pretty, cohesive aesthetic that is appealing to many potential homebuyers. They will make sure all neighbors abide by the CC&R, or the covenants, conditions, and restrictions set forth by the community.
2.) As mentioned above, the HOA will typically handle maintenance and beautification for all common areas. This also applies to shared community spaces, such as swimming pools, gyms, or club houses. While homeowners do have to pay dues to the HOA, having access to amenities is usually cheaper for the homeowners than if they had to handle all the amenities and the maintenance they require individually. As part of maintaining the community, the HOA may also include the fees for basic utilities in their monthly dues, such as water and trash, so the individual homeowners’ do not have to pay as much for utilities each month.
3.) Your HOA may make a conscious effort to encourage a sense of community by hosting events for Holidays, family-friendly neighborhood parties, food truck nights, wine nights, classes, and more. The idea is to schedule community events that encourage neighbors to develop friendships and interact. However, if you do have a major conflict with a neighbor, your HOA should also have standardized mediation procedures in place to amicably solve the issue.
4.) If you’re looking for a safe place to raise or start a family, your HOA may be able to help keep you safer. HOAs may provide security services in your neighborhood, such as staffing a guard gate, secured parking spaces, security monitoring, hiring night-time security guards or patrols, and acting as a liaison with local law enforcement. They may also have security systems in place, such as cameras and alarms, in common areas to ensure residents are safe at home or in public.
5.) In an HOA neighborhood, you can have a greater voice in the direction you want your community to take by participating in town hall meetings and voting for causes. If you feel extra motivated, you can run to be elected to your HOA’s board of directors. People who live in an HOA tend to feel increased pride for the community they have a voice in guiding.
Cons:
1.) Depending on where you live, HOA fees can range from $100 to $700 a month, and they can rise significantly with time to the point where they are no longer affordable for you or your family. In California, HOA rates can jump by up to 20% a year without a membership vote. This could become especially annoying if you are paying money toward amenities you don’t actually enjoy using. You may also be hit with special assessments, where unexpected expenses within your community suddenly become your financial responsibility, too.
Plus, you may be charged additional fees if the HOA has determined you broke a rule. These perceived indiscretions could be as simple as not bringing your trash cans in fast enough or your mailbox is a couple inches too tall. Management may even conduct occasional exterior inspections to look for rule violations and to assess fines, which can feel like an invasion of your privacy.
2.) The HOA will have a lot of control over what you can do to your home, but especially with the exterior. Whether you have simple plans to apply a fresh coat of paint or want to do a major structural remodel, you will first need to go through an occasionally lengthy approval process with the HOA before you can begin. You may have to alter your design plans before the HOA will give its seal of approval, which lengthens the process and you may not be getting exactly what you want.
You may also face rules and restrictions regarding lawn decorations, what holiday decorations you can use, and how long you can display your holiday decorations. If you have your own RV or boat, you may have to find somewhere to store it besides your driveway or front yard. Some HOAs place restrictions on how many vehicles can be parked in a driveway long-term, and if cars can be parked on the street overnight, which can be problematic if you have guests sleeping over.
3.) If you were hoping to make some extra income by turning your home into a rental property, you’ll have to check with the HOA first. Rules may be in place that limit your ability to do so. For example, only a certain amount of units in a condo building can be leased out at one time. If that number has been reached, you would not be allowed to list your unit for rent. There may also be restrictions in place that prevent you from listing your home as a temporary vacation rental on sites like Airbnb. If earning rental income from your home is important to you, make sure you clarify these rules prior to purchasing the house if possible.
4.) If you are a pet lover, you may need to be wary of HOAs. Homeowner Associations will often limit the amount of pets you can have, the size of pets, and the type of pets that are allowed. This is especially prevalent in condo building, where tenants may be sharing walls or living above and below each other. There may be additional breed restrictions in place that ban some dogs from the property entirely, such as pit bulls, mastiffs, german shepherds, akitas, rottweilers, and more.
5.) When you agree to abide by a homeowners association’s terms, you really are giving up a bit of your freedom. This makes it difficult to fight your HOA if you run into conflicts with it, or keep them out of your business if the board members feel a need to be involved. The HOA rules may not make it clear when you are responsible for a repair or when the HOA is, which can lead to discrepancies with assessing violation fees. However, still do not underestimate the power your HOA possesses. If members do not pay their monthly HOA dues, the HOA can take action by putting a lien on the property or foreclose on the home to collect its delinquent fees with the homeowner having little say in the matter.
For more serious conflicts, HOAs can involve themselves in litigation against vendors or even current or prior members, which can put the associations’ finances as a whole at risk. This, in turn, puts all members of the community at risk. If you try to sue your homeowners association and are unsuccessful, you would likely be personally responsible for paying back all of the HOA’s legal fees.
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