You can be part of a Homeowners Association (HOA) and under its rules, if the property you are buying is a condominium in a building or a single-family home in a separate, often gated, community. Typically, HOAs take care of security, maintenance, and repairs, and uphold the standards of how properties should look and be maintained. The agreement you sign when you buy a property that’s part of an HOA sets rules that will impact how you live for as long as you own the home.

Some HOAs are very explicit. Their CC&R (Covenants, Conditions, and Restrictions) can be pages long and cover things from what colors you can paint your home inside and out to whether you can park your boat or RV in the driveway.

HOAs vary in quality. A great one will keep everything well-maintained, secure, and looking impeccable. But if your HOA is hands-off, poorly organized, or simply incompetent, you could have problems with maintenance requests, the upkeep of communal areas, and the condition of the amenities.

How to proceed. Make sure the HOA you are considering covers all the basics. Talk to some of the residents. Look at the minutes from the HOA meetings for the past year. Ask for the HOA’s financial records. Read the HOA agreement.

What to focus on. When evaluating an HOA, look at these four things:

1. What exactly are the community restrictions? Does the HOA allow pets? Is there a list of colors you must use to paint the exterior or interior walls? Can you make only certain kinds of improvements? Can you sublet the property?

2. How stable are the HOA fees? Will the monthly HOA fee you have been quoted go up soon? How often are fees raised?

3. How financially healthy is the HOA? Find out as much as you can in this area. Ask to see financial statements and find out what repairs are anticipated and how much of the cost you would have to share as a resident.

4. Have residents had any disputes with the HOA? Find out if the HOA has ever been sued by a resident, or if any issues have come up at HOA meetings.

When buying a condominium or a single-family home in a community with an HOA, give high priority to evaluating the HOA. Feel free to contact us for more on how HOAs work, and to see if buying into one is right for you.


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