If you are in the market to purchase a new home, you will most likely look in neighborhoods that have established Homeowners’ Associations (HOA). You will want to check out the benefits and restrictions carefully before you make your decision to purchase.
One of the benefits of an HOA is your neighborhood will be well maintained. Generally, an HOA establishes rules to ensure the neighborhood looks good. Some of these guidelines may include lawn maintenance requirements, restrictions on square footage, fences, parking boats and other large vehicles, and limitations on exterior paint finishes.
Some HOA’s offer community amenities such as a pool, fitness center, playgrounds, walking trails and security gates.
Another great benefit of an HOA is some of your maintenance costs may be shared. Your dues may contribute to the maintenance of shared spaces such as community lawn care, snow removal and upkeep of common areas such as the pool or the fitness center.
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The HOA board or management company can settle some grievances between neighbors if matters cannot be resolved amicably.
A community with an HOA also is a great opportunity to get to know your neighbors better by serving on the HOA’s board or staying active in your association’s activities.
One of the negative aspects of an HOA is you have to pay dues — either monthly, quarterly or annually. You will want to be sure to include these dues to your budget.
Another drawback is any changes to your home, such as an addition of a screened porch or a shed normally must be approved by the HOA’s board. It is possible the HOA could prevent certain updates to your home.
Also, if an HOA is facing financial problems or is ensnared in a lawsuit, it could harm your ability to obtain a loan for a home and could hurt sale prices of homes in the community. There also could be times when special assessments will be needed to cover HOA expenses if their current budget is not sufficient.
When you live in a community governed by a HOA, you’ll have to follow its rules, even if you think they’re unreasonable. If you choose to live in a community that is governed by an HOA, you will want to stay involved in the meetings and activities so your voice is heard.
It is very important to read the bylaws and restrictions of the HOA prior to purchasing the property. If your offer is accepted on a home that is part of an HOA, you will want the opportunity to review the entire HOA packet prior to closing, and there is a rescission period after you receive the documents where you can terminate the contract if you are not satisfied with the terms of the HOA guidelines.
Be sure to use a real estate agent as your trusted advisor to guide you through the process of purchasing a home with an HOA so you have a complete understanding of the guidelines prior to settlement.
Wanda Ott is the 2022 president of the Lynchburg Association of Realtors and principal broker of NextHome TwoFourFive.