Does A Homeowner Association Fit Your Lifestyle?

Most condominium communities are governed by a homeowner association (HOA) but single family residence communities can also have community associations.

HOAs are self-governing, made up of homeowners serving/volunteering on a Board of Directors, often with the guidance of a professional association management company hired by the HOA. The association management company oversees repairs/improvements, services and maintenance, accounting, collection of HOA fees and payment of taxes, utilities, repairs, emergencies, etc. The HOA enforces rules and regulations that serve to preserve the appearance, quality and safety of a community.

HOA rules and regulations are designed to maintain a desirable quality of living, a safe environment for owners and guests and protect community property values. While these rules are beneficial for all, not all owners (or tenants) may chose to abide by the rules. If an owner fails to comply with the rules or pay their association dues in a timely manner, there can be financial penalties or legal action by the HOA.

If you purchase a home with a HOA it’s important to review and understand the HOA documents. This package of disclosures, known as a resale certificate, must be delivered by the seller to a prospective buyer within a timely manner (per the contract). The buyer has a specified time frame to review the documents, obtain more information if needed, and approve the resale certificate documents. If disapproved, the buyer may terminate the purchase contract.

Resale certificate documents are pretty dry reading, but contain important information about the community’s financial health and reserves. Meeting minutes can disclose information about the past repair/maintenance history, future capital improvement projects (and potential assessments), rental caps or rental restrictions, lawsuits by or against the HOA or individual owners, etc.

Buyers should be sure HOA rules and regulations don’t impact how they intend to use the property. There may be restrictions regarding pets, driveway parking, home businesses, modifications to exteriors, etc. Buyers should also understand the financial impact of regular HOA fees, as the additional expense will be evaluated by a lender if obtaining a loan to finance the purchase.

The professional association manager and HOA Board of Directors work to ensure the community’s structures and common areas are maintained and attractive, repairs are completed in a timely manner and the quality and value of the community is preserved for the benefit of all owners. Ultimately it is the buyer’s decision whether living within the guidelines of the HOA will be fit their lifestyle.