What to Consider When Considering a Home in a HOA

© Costa Constantinides, 2013
© Costa Constantinides, 2013

Homeowners’ associations have been around for the past half-century, and have earned quite the reputation in that time. On paper, the benefits are clear – dirty neighbors won’t be allowed to affect your property value, no one on your street will be able to paint their house a tacky color, and you’ll have a perfect excuse to tell your cousin to park his RV somewhere besides your driveway when he visits. At its core, a HOA is a communal safety net, protecting you and your assets from the actions of others in your neighborhood. But for every benefit of an HOA membership, there are at least two horror stories of helicopter HOAs impeding personal freedoms of homeownership, including a recent Missouri woman who was blocked from installing solar panels on her home by a HOA’s code of external décor. Restrictions on garden size, extra fees for community projects, and power tripping neighbors with bones to pick – the HOA can certainly be a double-edged sword in some situations.

But that’s the important thing to consider first – all HOAs are different. By their very nature, homeowners’ associations are directly representative of the community as individuals and a whole. As such, your first step in considering whether a home in a HOA community is for you is to investigate the HOA in question. Most HOAs have their codes and regulations posted online alongside information on violations, meeting times, the process for adding or changing rules, and whether or not the HOA can foreclose on your property due to nonpayment of dues or fines. While this is a good place to start, the information posted online is not always up to date. Scheduling a meeting in person to meet the president and other HOA members will give you a more accurate understanding of the current state of the community as well as a first foothold toward acceptance into the group. Remember, if you choose to buy that house, endearing yourself in the eyes of the community is crucial.

Another important step is to read the regulations of the HOA and find out of your home is already in compliance – or not. It’s rare that the latter would be the case, but if your dream home was recently foreclosed upon due to a previous owner’s issues with fines and dues or worse, you might want to give that some thought. Even worse is the hypothetical case of a home that would have to be renovated out of the box to comply with standards. On the same token, you should consider the improvements you would want to make and whether or not they will be acceptable. For example, environmentally-focused homeowners have come into conflict with HOAs in the past over things such as required sprinkler systems and pesticides. The aforementioned case of a disagreement between Francis Bibb, of Clarkson Valley, Missouri, and her HOA over her solar panels installed on her roof has led to nearly 5 years to date in litigation and over $100,000 in legal expenses. Not seeing eye-to-eye with a homeowners’ association can be very costly.

On that note, it would be wise to consider looking inward toward your own temperament. Are you buying a home mainly for the freedom of ownership and to avoid being told what to do? If so, a homeowners’ association may be a significant annoyance at best and a royal headache (not to mention wallet-ache) at worst. If you’re willing to comply with the laws of the land without question, an HOA can be your best friend. If you’re not, it can be your worst nightmare. It could also be beneficial to acquire a copy of the minutes from the most recent HOA meeting to see the attitudes and ideals of the individuals involved. Not all people work perfectly together, and when contracts like these are involved, not working perfectly can be a large issue.

A final important consideration should be the impact of HOA fees on your finances – both short- and long-term. Become familiar not only with the guaranteed monthly fees of membership, but also with the fees associated with fines. As well, many HOAs have a history of special assessments, which entail extra fees in order to fund community projects. You might ask for a record of the most recent special assessments so that you can budget for the possibility in the future. Even the monthly fees can add up fast, and the condo you thought was a steal can quickly become more expensive than that dream house you had looked at and passed on for lack of budget.

At their core, homeowners’ associations are not bad things at all. They’re there to form a community and hold each community member responsible for their portion of the public good. While some HOAs can become problematic due to individuals or a power tripping president, they work for the most part for their constituents rather than against them. The considerations outlined here reinforce the importance of investigating the specific HOA at hand rather than being scared away by horror stories before even taking a look. With your own assessment of the community, you’ll be much more prepared to take that next step toward your new home.