Let’s discuss Homeowners Associations – also known as HOA.
Most planned communities have a Home Owners Association.They could be either condo associations or active adult communities. However, before you sign the contract to purchase a home, be sure that you know what is involved with belonging to an HOA. You have the right to know how much the HOA fees will be, and what they cover. Because this cost can be a significant part of your housing expenses.
How much are the fees?
In the Monmouth / Ocean area, we’ve seen a wide range of fees. We’ve seen HOA fees which are as low as $9. per month. And, on the high end, they can go to over $1500.00 !
The services you get for that amount of money vary. Most, but not all, Home Owners Associations include lawn maintenance (grass cutting) and snow removal. Quite often, 3″ or more of snow may be required before they address the snow removal, however, some HOAs require less. Quite often garbage and recycling services are also included. Some communities may offer a club house with pool, tennis courts, a gym, even golf. As a rule of thumb, when there are nicer common facilities, the higher the monthly fees. However, another factor is the construction of the homes. If the homes are standalon detached homes, the home owner is responsible for the exterior maintenance. As a result, the HOA fees are usually less. But, if there are multiple homes in the building(s), the HOA is responsible for exterior maintenance. Therefore, the HOA fees are usually higher.
Type of Ownership
Another factor is the type of home ownership. If the ownership style is fee simple, that means that you, the homeowner, are responsible for all maintenance of your home – both inside and out. If a new roof is needed, reach into your pocket to pay for it. However, if it’s condo ownership, that means the association owns the exterior of the building and the HOA is responsible. We find that most HOAs state that windows and doors are considered “interior”. As a result, the home owner is responsible for them.
Yet another type of ownership is a co-op. Co-op ownership is similar to condo ownership. However, instead of owning the property, you’ll own shares in the corporation that owns the entire complex.
More in the HOA
Sometimes, the HOAs provide basic cable TV which is included in the monthly fees. Yet others provide service contracts on appliances and HVAC systems.
The HOAs also many times have rules and regulations. These can dictate what type, size and number of pets are allowed – if any. They can tell you when and what color to paint your front door. Additionally, they can prohibit you from parking a boat or an RV in your driveway. They enforce these rules and have the power to issue fines to violators. If necessary, HOAs can levy special assessments to pay for major repairs that are not in the budget. The most common example for this is if the snow removal expenses exceed the budgeted amount.
When you purchase a home with an HOA, get a copy of the financials to see if they are financially viable. If you need help deciphering the financials, your real estatea attorney should be able to help. Check out the rules and regulations. And be sure that you understand them before you purchase.
Are you ready to either buy or sell a home? Contact us