For many home purchases in South Florida, you will be joining the Homeowners’ Association (HOA) or Condominium Owners’ Association (COA). Unlike most groups, you will join this club whether you like it or not. This doesn’t have to be a bad thing, though.
While the HOA board probably won’t be your best friend, they don’t have to be your enemy either. Read on to find out more about how this association can help (or hurt) your experience as a homeowner.
The Basics of HOAs and COAs
If you’re not familiar with HOAs, the concept might seem a little foreign. You could be asking, “What do you mean I have to pay some group between $200 and $500 a month (or more for some COAs)? I don’t even know these people.”
In general, Homeowners’ and Condominium Owners’ Associations exist to protect the community’s property values. They create and enforce deed restrictions and other rules to ensure that everyone’s property is maintained. They also contribute to your quality of life through common areas like pools, clubhouses, fitness rooms, landscaping, etc., depending on whether you live in a house or a condominium.
The rules created and enforced by HOAs are known as covenants, conditions, and restrictions (CC&Rs), and they are there to protect you and your neighbors.
In the case of a subdivision, these rules might restrict the color of your exterior, the types of landscaping you can have done, whether or not you can park vehicles on the street, etc. For homes in a shared building, like a condominium, the rules might determine what color your front door can be, what items you can have on your balcony, whether or not you can have pets and what sizes are allowed, etc.
If you plan to make any repairs or renovations, you will typically need to get the approval of the HOA before commencing work. This ensures that all properties maintain a certain aesthetic. This is, of course, in addition to any regulations and permitting required by city ordinance. So why go through all this trouble?
All those CC&Rs aren’t just about dictating what the neighborhood looks like. Some homeowners feel that the associations are there just to make people’s lives more difficult, but they actually serve an important purpose.
If you’ve ever driven through a neighborhood where every house looks different from the last, with wild colors and no uniformity, or if you’ve walked through a condo courtyard and it seems like some residents are running a laundromat on their balconies, you can see why restrictions are important.
In addition to the overall look of an area, it is essential that homes are properly maintained. If your neighbor allows algae to grow up the brick, lets the paint chip, and seems to prefer weeds over actual grass in his front lawn, that’s just his problem, right?
Unfortunately not. When that neighbor decides to sell his home, all that neglected maintenance will mean a lower selling price. And if that’s a common occurrence, it becomes your problem when you decide to sell your home because the comparables are lower.
For COAs, the association is also in place to make sure that the shared areas (like the roof) are in good condition. The COA protects everyone’s investment and ensures that the landscaping and common areas are in excellent shape, something you no longer have to worry about.
HOA Considerations Before You Buy
How do you know if the HOA or COA will work for you before you buy a home?
- Know the rules. You don’t need to know every single detail, but you should get a general idea about what freedoms you will have with your new home. You should also find out what the penalties are for violations. In particular, find out whether the HOA is allowed to foreclose on your property if you fail to adhere to the rules or fall behind on your dues.
- Compare the potential property to the rules. If the home you want to buy is already noncompliant, that could mean an expensive and frustrating start to your adventure in homeownership. Find out whether the current owner is willing to make the home compliant, or find out how much time – and money – it will take if you have to do so yourself.
- Learn about the fees. You’ll want to know how much the yearly assessment dues will add to your mortgage, of course. But you should also look into the association’s policies on special assessments. If your condo’s building is about to need a new roof, this could mean an unexpectedly large expense for you, even though you are a new owner. Keep in mind that these fees will be an ongoing expense, so make sure they fit into your budget.
- Assess the benefits. Find out what is covered by your dues. Sometimes a fee will seem high, but it could include utilities like cable and trash pick-up, or expenses like landscaping.
- Get a feel for the HOAs personality. If possible, sit in on the next meeting or read through a copy of the last meeting’s minutes. This can tell you a great deal about what members are concerned with and how the board responds. Make sure you’re comfortable with what you have learned.
- Trust your gut. You should be able to tell whether you’ll be happy dealing with the HOA. If the rules seem overly restrictive, or if a quick drive through the neighborhood or walk through the building tells you that the rules aren’t enforced, you’ll know whether the association is a good fit for you. Some people are more more laid back; others are more detail-oriented Whichever one you are, make sure that you are comfortable with the direction of the HOA before you buy.
You’ve may have heard horror stories about finicky HOAs or COAs that cost a fortune but don’t seem to do anything. These are the exception rather than the rule. Either way, though, you’ll want to know what you’re getting into before you start the closing process. Because if your dream home is in a nightmare neighborhood, you’re in for many a sleepless night.