5 Things You Should Know About Your HOA Before Buying

When it comes to moving, your new neighborhood is just as important as the house itself, especially if it’s governed by a homeowners association (HOA).

More than 70 million Americans live in communities run by an HOA. These organizations provide amenities for community members, while also enforcing certain rules and regulations. Like anything else, there are pros and cons to this type of neighborhood.

If this is your first time considering a house that is governed by a homeowners association, it’s essential to do a little research. Here are five things you should know about your HOA before buying.

1. HOA Fee Amounts

HOA fees can vary drastically when you compare them across different states and communities. The average is approximately $300 per month, but some developments can cost thousands. This makes it an important cost to consider because it’s in addition to your estimated monthly mortgage payment.

Further, HOA dues aren’t set in stone. Like taxes, they may be increased each year or every few years. Ask the HOA you’re considering for financial disclosures and board meeting minutes to learn about how often rates have been raised (or whether any special assessments have been made).

2. HOA Duties and Amenities

Whether you’re moving out of state for a job or across town to get more square footage, it’s important to have access to the amenities you care about. Your HOA will provide certain benefits in exchange for the monthly dues you pay. This should include landscaping in common areas, road and sidewalk maintenance, as well as proper access to utilities.

In addition, many HOA fees are used to either build or maintain special amenities. From pools to playgrounds and even fitness centers, your dues can pay for any of these spaces that are available to the community. Many HOA communities also have an added level of security in the form of a gate. When it comes to resale value, these types of perks may help you sell your house at a higher price.

3. CC&Rs

Although a change of address is always exciting, regulations are often the biggest downside to moving into a house with an HOA. The set of rules governing a community are usually referred to as CC&Rs (Covenants, Conditions, and Restrictions).

While every community is different, these are some of the most common types of regulations:

• Parking restrictions: In most cases, street parking is strictly governed under an HOA. This may limit you when it comes to parking on the street in front of your home and could even impact the types of vehicles allowed.
• Exterior guidelines: If every home is supposed to follow a certain color scheme or design, you will be limited when making any changes to the exterior of your home. This also applies to certain landscaping requirements. 
• Pets: Some HOAs will limit the number of pets you can have, as well as the type and allowable size. You will also be required to clean up after your pet when walking around the neighborhood.
• Rentals: For those who are hoping to rent out their home, HOA regulations may put a damper on your plans. Whether you’re in the business of short-term vacation rentals or prefer long-term renters, be sure to research your HOA restrictions.
• Holiday decorations: Because HOAs are responsible for helping the community maintain a certain appearance, there may be restrictions regarding holiday decorations. This usually includes types of decorations allowed, as well as a timeline for when they must be taken down.

In addition to getting clarity on the rules and regulations, it’s important to know what fines exist for any potential violations. Do you receive a warning first? How many warnings are permitted before you are fined? How are fines structured?

4. The Building Approval Process

As previously mentioned, your HOA will strongly impact the exterior appearance of your home. That said, it can also dictate what you do in your backyard. It’s highly likely that you’ll need approval for any structural additions to your house. Whether you want to build a pool or install a deck, you usually have to get approval from your HOA for these additions.

Even if you don’t anticipate making any changes to the house, it’s good to have an idea of what the building approval process looks like. This will help you know what to expect if you ever need to seek permission to do work on the house.

Are you buying land to build a home in an existing neighborhood that has an HOA? It’s crucial to be aware of building requirements and approvals as you begin drafting plans for your new house.

5. Board Construction and Protocol

The board is an important component of the HOA because it will oversee various decisions, contracts, and finances. You’ll want to know how many people are on the board, how they’re elected, and how often they meet. If you have interest in getting involved, you should also research the process and timeline for this type of participation.

Finally, take a look at past agendas to see the types of issues up for discussion during board meetings. You may also want to see details regarding the process for contesting fines and how the board handles these disputes.

Closing Considerations

If you’ve never lived in an HOA community, there’s a lot to consider before deciding to join one. The biggest issue to think about is whether you have the money to afford the dues on top of your new mortgage payment. While there are home buyer rebates and other methods of saving money when purchasing a home, HOA dues are usually nonnegotiable.

Finally, it’s important to have a full understanding of relevant rules and restrictions. While many HOAs help create a clean and appealing environment, it can be a bad move if you’re looking for a certain amount of freedom. Work with your real estate agent to learn about the seller’s experience with the HOA, as well as any neighbors or other community members.