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When you purchase a home, sometimes you will have obligations set forth by the local Home Owners Association (HOA). At times, it also includes a small fee in order to keep surrounding common areas up to par. You will need to educate yourself about the HOA before or after you purchase your home.

The Basics

The fees associated with the HOA are typically between 200-400 dollars. It is paid monthly. Typically, the more upscale the residence is, the higher the fees will be for that specific property.

One thing you will need to know about the fees is that it is subject to change. At times the HOA may not have enough money saved up for the new addition to a common area and the fees may be adjusted.

Learn the Rules

Rules You may be lucky enough to find the rules for those specific HOA’s rules online. If you cannot find the rules, then you are able to contact the real estate agent to ask for these documents.

Make sure to pay very close attention to any information regarding fines or dues. There should also be information listed about meetings.

Compliance

Make sure that the home you would like to buy is in compliant with the document before you purchase it. You may be stuck with upgrades, fixes, or other aspects that will cost more money to fix.

If you purchase the home and it is not up to code, then you may be subject to fees as well. Ensure this is spoken about with the real estate agent before purchasing the home.

Questions to Ask

Here are some specific questions you may want to ask:

How are the fee increases set?
How often do the increases occur?
How much have the fees increased over the last 10 years?
How large is the reserve fund?
Is there a record of assessments that you can view?
What do the monthly fees cover?

To make sure that you are not getting the “raw end of the deal,” compare the fees listed on the homes you are interested in. Then compare the information that you have collected thus far. It will help you to make the decision on whether this is the home you would like to have in association with the HOA.

Before deciding to purchase a home (lakefront or not), one of the most important things you must do – one that buyers often forget – is to speak to the homeowner’s association (HOA) before buying.

The homeowner’s association is the organization that sets the regulations and rules for the community. Regulations and rules that often affect what you can and can’t do with your property.

Because of this, the following are a few questions that you should be sure to ask the local homeowner’s association before deciding to purchase any new house:

1. What are the rules?

You won’t want to break any rules simply because you don’t know what they are. Not to mention, it’s good to know what the rules are up front in case they end up restricting you from doing something that you wanted to do.

For example, some homeowner’s associations won’t allow you to build any additional structures onto your property. Such a restriction would be problematic if you were looking to add a deck, patio, or porch area.

There are smaller rules to be on the lookout for as well, such as whether you’re allowed to have pets. What a disaster it would be if you bought a home only to find out you’re not allowed to keep your dog there! Be sure to take a look at the list of restrictions that the homeowner’s association has put into place.

Some commonly covered guidelines in homeowner’s association rules and regulations include:

The home paint color
The ownership of pets
Where you are allowed to park
Whether you can build decks or patios
Whether you can run an at-home business
What type of landscaping you’re allowed to do
Whether you can have satellite dishes
How high your fence can be
Whether you can have a fence on your property
Whether you can put up mailboxes, flags and other items in your yard

2. How much are the dues?

If you live in a neighborhood that has a homeowner’s association, then you’ll have to pay dues. These dues vary from one homeowner’s association to another in both cost and how often payment is due. Typically, dues are paid monthly, quarterly, or yearly. As soon as you become a homeowner within the community, you’ll be legally obligated to pay these dues. It’s important to figure out what the dues are ahead of time so that you can better plan out your financial arrangements.

3. How often are the dues increased?

Find out how often HOA dues are increased and by how much. If dues don’t change often – and when they do they are by a small amount – then you won’t have to worry much. However, if the dues regularly increase and by a large amount, then this is a factor you need to take into account when deciding on the purchase of the home.

4. How much are the assessments?

You’ll also have to pay for assessments that cover work such as snow removal or trash collection as well as for maintenance for community areas, such as playgrounds or pools. Just like knowing what your association dues will be, knowing how much the assessments will cost is integral to figuring out your finances and whether or not you can afford to live within a specific community.

5. What is the current state of the homeowners association?

Find out if there are any issues between the HOA and any of the homeowners. Are there a lot of ongoing issues between them? Has there been a history of litigation or other issues? You may not want to deal with an HOA that has a bad reputation amongst residents in the community. Ask the homeowner’s association if you can see notes on a previous meeting. You can often tell by the notes whether they are picky about the rules or lenient. Be sure to walk around the neighborhood and ask some of the homeowners for their opinion on the homeowner’s association as well.

6. What do their reserves look like?

Ask to see financial statements for the last few years as well as the current and future budgets. You should look at the reserves for things such as sidewalk repair as well as at the maintenance contracts to make sure that they are reasonable. You’ll want to make sure that the dues and assessments that you will pay will be put to good use, after all.

These are some of the things that you’ll want to ask the homeowner’s association before you make the final decision to purchase a new home. Neglect speaking with them and you could end up having some real issues in the future as a homeowner within the community.

Tag: HOA

What To Expect From a Home Owners Association (HOA)