Is a homeowners association right for you?

Is a homeowners association right for you?

A homeowners association (HOA) can be a good thing. But it’s not right for everyone. The HOA rules might be what attracts you to a new home...or what drives you away. If you're on the fence about whether you want to live in an area with an HOA and abide by the rules, it’s worth investigating the pros and cons so that you can make an educated, informed and confident decision. After all, a home is usually the largest purchase of your life so you want to get it right.

Homeowner's Associations Overview

An HOA provides you with the chance of living in an orderly and well-run neighborhood that's managed by an organization that sets the rules and regulations under which you and other community members agree to live.

If the neighborhood you’re considering moving to has an HOA, it was most likely founded by the real estate developer who wanted to set standards for managing a community of condominiums, houses, or townhomes. The association gave the developer (and subsequent governing board) the authority to administrate the conditions, covenants and restrictions of the development and manage its common elements.

While some people may welcome the chance to be a part of an organized living arrangement, others might not like the aspect of having restrictions on how they can manage their own property. If you’re thinking about moving into a community run by an HOA, there are pros and cons to take into consideration.

The Pros

You Live in a Well-Groomed Neighborhood

There are strict guidelines put in place to ensure the neighborhood looks good. Typically, lawns are meticulously groomed and manicured, there are limitations imposed on the colors of exterior paint, and there are restrictions on parking large vehicles and boats on the street.

You Have Access to Amenities

When living in an HOA community, you often have access to amenities like a fitness center, pool, children's play area, parks, security gates and more.

You Have Most Maintenance Done for You

Your HOA will likely manage and maintain all of the community's common areas and take care of tasks like mowing the lawn, weeding the flower beds, shoveling snow and other outside maintenance work for those parts of the neighborhood.

Your Home Owners Association Handles Neighbor Disputes

When a dispute occurs between neighbors, your HOA generally steps in to mediate. So, if a neighbor has a barking dog or is throwing loud parties, the HOA will contact the offender instead of you having to do it. An HOA enforces a rule against after-hours noise.

The Cons

You Risk Foreclosure if Dues Aren't Paid

If you fail to pay your dues for living in the community, an HOA can foreclose on your home (depending on the laws in your state.) In some cases, an HOA has certain limitations on when they can foreclose.

You Don't Have as Much Freedom

When you live in an HOA-governed community, you have to abide by its rules and regulations, even if you don’t agree with them. While you often have the ability to petition the HOA to get a rule changed, they’re not usually altered unless a majority of residents support it. However, petitioning them does not always mean you will get what you want. If you lose, you still have to live with the rule.

You Have to Live with Certain Restrictions

Some HOAs frown on home-based businesses that involve commercial activities. So if a home business is your source of income and your HOA disallows it, you may have to consider changing it if you want to stay a member. Many HOAs also place restrictions renting out your home. They may also screen all future residents to the point where it may jeopardize your ability to sell.

You Have to Pay HOA Fees

For you to live in and belong to an HOA community, you have to pay certain dues. They can be as little as $100 a year to more than $1,000 a month, depending on the community.

For some people, living in an HOA-controlled community is the right place for them. Others prefer the freedom and independence of living in a property free of outside oversight. As you select a home or community to live in, a good realtor will help you learn the ins and outs of each neighborhood so that you make a decision that’s right for you.

Speak to our knowledgeable mortgage loan officers at Liberty Bank to help you find your perfect home.

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