If you’re on the hunt for a new family home, you’ll likely come across an option with a homeowner’s association (HOA). While perks like safety and community resources may seem enticing as parents, you need to know all the information before jumping into ownership of one of these homes. Research the HOA online, talk to residents and sit in on a meeting to get the complete picture, so you don’t regret your choice after signing.
1. HOA Dues and Other Associated Fees
Your budget won’t stretch quite as far when purchasing a home with an HOA. In addition to your mortgage and home insurance, you’ll also have to pay monthly dues. This money goes into the association’s account, which is then used to maintain communal areas.
The HOA will occasionally assess one-time fees for unexpected replacements or repairs. For example, if an earthquake damages the roads within the community, you may be liable for a portion of the cost.
2. Provided Services and Amenities
Most HOAs offer some form of services and amenities, though it will increase the cost of your monthly dues. You might see options like a community pool, clubhouse, playground, park, theater, gym and more. Other perks might include driveway snow removal and lawn mowing services.
Consider your family’s needs and wants when looking into an HOA. Paying an excessive amount each month to access a gym no one will use isn’t practical. However, a safe playground would be a golden opportunity for you to get some kid-free time.
3. Covenants, Conditions and Restrictions (CC&Rs)
When you buy a home within an HOA, you must also agree to all the CC&Rs. This set of rules governs any concerns near and dear to the community’s hearts. Most will restrict exterior paint colors and the type of lawn decorations you can use. However, you’ll also find rules about installing outdoor basketball hoops and how many cars can be visible in your driveway. Scrutinize the paperwork with a fine-tooth comb before agreeing to the purchase. You wouldn’t want to be stuck following rules that don’t fit your family’s needs or lifestyle.
4. Red Flags
Aside from strange CC&Rs, you should watch out for other red flags that could signal a careless or outright dreadful HOA.
A Low Reserve Fund
Part of residents’ monthly dues should go to a reserve fund, which is used to take care of emergency repairs, replacements or special projects. When there isn’t enough money in this fund, the association will issue special assessments to each homeowner to cover the difference. Before purchasing a house within an HOA, you should always request a copy of their budget to see where they stand.
Poor Reviews From Residents
Part of your research into an HOA home should be to chat with a few residents. What do they like and dislike about living under the association’s governance? Take everything you hear with a grain of salt, but if you repeatedly get reports of the same types of underhanded or unfavorable practices, you may want to think twice about moving forward. At the very least, you’ll have a few more questions for the board.
Lack of Transparency
One thing you don’t want to hear from other homeowners in the association is a lack of communication from the governing board. Residents should get semi-frequent mail about important issues or upcoming events. Without this correspondence, homeowners are left in the dark and miss out on voicing their concerns.
You should also assess your contact with the board during your research process. Was the HOA helpful in getting you essential information and documents to review? Did they answer your questions openly and honestly?
Difficult Process to Amend CC&Rs
You want to avoid an HOA board with too much control. You should ask what they require for a majority vote to amend CC&Rs. Often you’ll come across a necessitated 75% vote in favor of passing any changes, which can be challenging to achieve given that not every member comes in to vote.
Poorly Maintained Communal Areas
Take a drive around the entire establishment and visit all the amenities. Does the grass look green and uniform? Is the landscaping well maintained? Are the facilities clean? Unkempt and dirty surroundings reflect poorly on the HOA’s ability to manage its finances and property.
Drastic Rises in Monthly Dues
In today’s economic climate, a rise in monthly dues is understandable. However, you should ask for a record of past month’s dues going back a few years to watch for trends. You may want to ask some follow-up questions or steer clear if you see many drastic price hikes. Pay especially close attention when the property you’re looking to purchase is barely within your budget – an increase in dues the following month could make your family’s new home unaffordable.
5. Protection Against Age-Restrictive Covenants
Another crucial detail for parents looking to move into an HOA is knowledge of your protections. The Fair Housing Act and judicial precedent make it nearly impossible for HOAs to enforce age-restrictive covenants. For example, a condo building can’t introduce a rule about no children in public amenities. Know your rights and move on from HOAs with questionable CC&Rs.
Not All HOAs Are Equal
As you research, you may encounter a few terrible HOAs. Unfortunately, you’ll find these questionable boards everywhere. Don’t let a handful of duds turn you away from this possibility if you think an HOA could be good for your family. The many perks for parents and kids are worth considering and holding out for — just do your homework before signing the papers.
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