Understanding Homeowners Associations
Mortgage Loan Originator
Vicky Rowe
Published on May 31, 2022

Understanding Homeowners Associations

If you are considering the purchase of a home in a subdivision or condo complex, it is likely that you will become a member of a homeowners association (HOA). An HOA is comprised of all of the homeowners in the same neighborhood or development and is typically governed by a board of directors. The HOA usually has some control over how properties are utilized and provides services and amenities to the community.

An HOA can be beneficial in many ways, including:

  • Community appearance   -  Most homes within an HOA are required to keep up with the standards of curb appeal set by the association. Otherwise, the homeowner is subject to a potential fine. Because of these standards, you are less likely to find unkempt lawns, commercial vehicles, and peeling paint in your neighborhood.
  • Community amenities   -  Many HOAs provide recreational amenities to residents. These amenities often include swimming pools, tennis courts, golf courses, walking trails and other community features.
  • Community management   -  If you have a complaint about something with your neighbor, the HOA may be able to handle the issue rather than leaving residents to deal with the disputes.
  • Community bonding  -  Most HOAs have board meetings and host community activities. These events are an excellent way to get to know your neighbors.

HOA fees vary, as do regulations, and some fees may be higher based on the level of community amenities and services offered. If you are considering a home purchase in a community that is governed by an HOA, it is important to read the fine print so that you know exactly what HOA membership includes. In some states, sellers are required by law to provide buyers with a "Residential Property and Owners' Association Disclosure Statement" prior to acceptance of a signed purchase contract. This document includes information such as restrictive covenants, HOA contacts, dues and services. If you are buying a condo or townhome, the HOA dues are generally higher when homeowners insurance is included in the fee.

For some people, a neighborhood with an HOA may not be the right choice, but there are certainly many positives, such as having property values remain strong because of high community standards. If the neighborhoods you like have an HOA, be sure to inquire about the costs involved and weigh out whether their amenities are worth the investment.

As always, I would be happy to discuss your questions and thoughts with you. Call me today to set up an appointment.

Mortgage Loan Originator
Vicky Rowe Mortgage Loan Originator
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(919) 892-5454