It's great knowing that your new neighborhood is clean and well-tended. It's not all good when it comes as the expense of your freedom. Homeowners associations can help keep your home value high, or even make you lose your home. Learn more about the benefits of homeowners associations but remember that under the Nazis, the trains did run on time.
What are HOA's?
Homeowners associations (also known as HOA's) are nonprofit legal entities that seek to maintain the quality of living for a planned community of homes. If there are common amenities (like swimming pools) in the development, the HOA will manage those areas. HOA's collect dues and elect leaders from the affiliated home owners.
When you buy into a community governed by an HOA, you agree to abide by covenants, conditions, and restrictions.
The benefits of an HOA
There are many benefits to living in a neighborhood or development with a community association. Homeowners association look to protect and improve the community. In doing so, an HOA may create and maintain resources like golf courses, parks, ponds, pools, fitness centers and more that everyone can share in. Meetings provide a way to meet your neighbors and share not only information, but a sense of community. Larger associations may have frequent newsletters or websites that keep you up to date on neighborhood news.
What is governed
The list of rules and regulations is different for each association. Common regulations include curbs on the color of your home, landscaping, fences, swimming pools, pets, play equipment, outbuildings like garages and tool sheds, mailboxes, lights, pets and even the length of your lawn's grass.
Depending on your point of view, these restrictions either provide much-needed order or are a Draconian nightmare. (Especially when you're hit with a $25 fine for flying your college's flag after they win the championship.)
First and foremost, none of this comes free. (As opposed to HotPads.com!) Your association will levy assessments that you have to pay, with your house on the line if you don't. Your community dues aren't the end of the story. Violate HOA rules and you can rack up fines as well. Worse yet, these bills will allow your HOA to foreclose on your home and evict you and it's all legal.
You need to be aware that there are no state or federal laws governing these associations or any rules that may be passed, as long as they do not violate housing discrimination laws. This means that a few individuals can wield very broad powers over you and your property and you'll have little recourse if there are problems.
What you need to do
Homeowners associations are a relatively recent phenomenon. The first ones sprang up in the mid 1960's, so older older neighborhoods typically won't have them. However, there are questions that you need to ask when shopping for a home to make an educated decision. Find out if the home is governed by an association, what the dues/assessments are and what the myriad rules and regulations are.
Your best bet is to request a copy of the by-laws from the seller or the association's office. This can be a fairly hefty document. Still, it beats learning too late that you can't wash your car in your driveway.
Also get an idea of how much cash the association has in reserve. With facilities and common areas to keep up and little cash in the till, you can expect big increases in your HOA assessments if you're not careful.
Other Buyers Guide Topics
Jump back for the index of articles on the basics of buying a home.
Other Web Info
The home page of the Citizens For Constitutional Local Government, a group that fights for homeowners' rights.