HOA: Homeowner's Association - Pros & Cons

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Homeowners Association (HOA)

Homeowners Associations (HOA) can be a tricky thing. They can be helpful or a hindrance depending on what your goals are when you purchase a home. Essentially what an HOA does is collect funds from each member of a property or development. Then use those funds to maintain the building/buildings and the grounds of the property. Most often they include expenses like lawn maintenance, snow removal, and water. There are even some HOA’s that will maintain everything up to and including the exterior of your home.


This can be very beneficial to someone who is looking for the least amount of maintenance possible with the purchase of their home. Even for someone looking for a possible rental property that requires very little time investment to maintain. However it is critical that you ensure that the HOA will allow tenants to occupy the property, as some do not allow it.


Understand the Rules

Before buying into a Homeowners Association it is important that that you read all the rules. Sometimes those rules will change. The majority of complaints that we receive from clients regarding an HOA happen when the rules are changed. Most HOA's require a set dollar amount each member pays monthly or annually. This is what allows the HOA to maintain the benefits sit in place. However sometimes the HOA run into bigger maintenance items that require all members to pay more for. For these larger or unexpected cost are HOA's call an assessments upon all the members of the HOA. The cost can range anywhere from one dollar  to several thousand dollars depending on the issue and the number of participants in the HOA.


An HOA typically also places a set of rules upon all the inhabitants of the property. These are usually called Covenants, Conditions, & Restrictions or CC&R’s. These can also be a good and a bad thing. The positive side of CC&R’s is that it will help to maintain a standard or condition throughout the property. You will most likely not have to worry about your neighbor decreasing your property value due to multiple junk cars sitting in their front yard. Which can make your property less attractive to potential buyers.


Does it Fit Your Lifestyle

On the other side of the coin, you may find that there are restrictions in the CC&R that interfere with the way that you choose to live your everyday life. Make sure to read the terms of the HOA and the CC&R carefully to ensure that they agree with your lifestyle. For instance, if you are an avid fisherman and own a boat, it might not be the best idea to buy a home that has an HOA that doesn’t approve of having nautical vessels parked in the driveway.


As an HOA/CC&R can place restrictions on the exterior appearance of a home.  When shopping for homes in an HOA make sure to check that the home already meets compliance of the HOA. Some CC&R’s will dictate what color homes in the neighborhood can be painted. You don't want to find out after you purchase a home that it doesn't meet the color code and have to repaint the whole house. 


Make sure that you thoroughly read and knowledgeable on all the rules and fees that apply to the HOA . Try to attend an HOA meeting before you purchase. This is usually very informative as to how the HOA will operate, and if they are a group that you could see yourself working with. Determine if the HOA is managed by people that live within it, or by a private outside company. This can determine if the HOA would be willing to put rules into effect that might reduce the quality of life for those living within its jurisdiction. Also try to determine if the HOA is too strict or not strict enough. There is a fine balance to be held to ensure that the quality of all the homes in the neighborhood is upheld, while also not infringing upon the rights of homeowners to live freely.


An HOA can be a great ally when your neighbor wants to paint their entire home a bright green, and have a junkyard as a front lawn. On the flip side they can have a serious impact on your personal finances when they determine that you need to do extensive maintenance to your property that you may not find necessary. The importance is that you are aware of all the requirements and rules before you enter into an agreement with an HOA. Download our easy HOA checklist to ensure you don't miss key things to check before accepting the rules.


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