Across the U.S., homeowners’ associations are on the ascent. So, what’s the draw of homeowners’ associations? By the same token, what are the drawbacks? A well-run and managed HOA can be a blessing, and a poorly managed HOA can be a curse. Here are some of the blessings, and the curses, of homeowners’ associations (HOAs).
1. Neighborhood maintenance
Generally, an HOA establishes rules to ensure the neighborhood looks sharp. These include strict guidelines about keeping lawns manicured, restrictions on parking boats and other large vehicles on the street, and limitations on exterior paint colors. This type of oversight eliminates issues with one or two properties weighing down all property values due to an unpleasant exterior.
2. Access to amenities
An HOA can offer community amenities such as a pool, a fitness center, parks or common areas, children’s play areas, and even neighborhood security gates.
3. Shared costs
HOA dues are earmarked for maintenance of shared spaces. This includes community lawn care (but not for your own yard), community snow removal (but not for your own property) and upkeep of common areas like the pool or the fitness center.
When buying a home in a community with an HOA, you’ve got to add HOA dues to your budget. These dues will vary depending on the shared costs required to maintain the neighborhood elements the HOA is responsible for.
When you live in a community governed by a HOA, you’ll have to follow its rules, even if you think they’re ridiculous. If someone buys a home in an HOA community and wants to make changes to the property, such as the addition of an enclosed patio, it normally must be approved by the HOA’s board. It’s possible that an HOA could prevent certain updates on a home. You do, however, have the option of petitioning the homeowners’ association to change any rule you don’t agree with. But if you lose, you may have to live with it.
3. Poor Management
If an HOA is facing financial problems, is being mis-managed, or is ensnared in a lawsuit, it could harm your ability to obtain a loan for a home and could hurt resale prices of homes in the community.Questions? Contact Faith Home Lending Today!