HOAs – Grasp the Basics

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If you are considering getting a home in a planned unit set up or in a condominium, you should learn as much as you can about the Homeowners’ Association or HOA in question. This body is an important part of living among a group of residences and influences the life of the people who live there to a considerable extent.
An HOA is a legal group, which manages a community of homes after the developers have handed the units over to a certain number of owners.

Learn About the HOA Before Purchasing the House

The HOA of a particular community is the body that takes responsibility for the community’s common amenities and areas such as lifts and foyers. This body imposes certain rules on the members of the community – these rules are commonly known as CC&Rs which stands for covenants, conditions and restrictions. So since these rules will affect you personally, you need to know as much as possible about the HOA of the property you are thinking of buying. In particular, make sure you know all about the following aspects:

? CC&Rs: Find out what exactly the CC&Rs that apply are. These could deal with whether or not pets are allowed in the building, or with rules about structural changes or renovation you may want to do.
? Homeowners’ Association Bye Laws: Read these to find out what rules the HOA runs itself by.
? Homeowners’ Association Budget and Financial Statements: Find out what expenses you are likely to incur each month. Look for regular costs like salaries paid to staff, utility bill amounts and costs of maintenance, and check that a minimum of 3% of the HOA’s gross operating budget has been kept aside for unexpected expenses like repainting of the building, or roof repair. If you observe that this budget is on the low side, be prepared for extra expenses later. Go through past financial records to ensure that HOA in question handles money well.
? HOA Meeting Minutes: Read these to see what kind of work the HOA is currently doing.

Examine the Offering Thoroughly

Once you belong to a particular residential community, you will be a part of the HOA there. You will have to pay a fee every month, part of which is used to maintain the common areas of the building, and part of which is kept aside for expenses that may arise for repair, renovation and so on. Usually these charges vary, based on the range of facilities in the development, between $150 and $600 each month.

The common facilities are the best part of going in for a home that is part of an HOA-run community. These facilities are usually very attractive in such a property. For instance not many homeowners can have a swimming pool or a gymnasium on their properties, but those who live in a HOA-run community have daily access to these benefits. Also, an HOA homeowner is likely to spend less on his or her upkeep of the property since all the owners in the community share these expenses. Chores around the home are less, too, since the HOA is responsible for cleaning and maintaining the property.

Be Very Clear About CC&Rs

This needs particular attention. Such regulations have evolved for the common good, but many homeowners are often irked by the strictness of the rules. However, they do have to be followed, so make sure you are willing to do so before you make your home purchase. Also, if additional expenses arise, you will, along with the other homeowners, have to bear them.