What is an HOA?
Homeowner’s associations can be great for many communities because they ensure a certain standard of living for people.
On the flipside, some homeowners may find the HOA to be too involved in their daily decisionmaking and living habits. Before moving into a HOA community, it’s important that you understand its rules and standards, as well as the rights you have as a homeowner. Pay close attention to any restrictions or costs that may not fit your goals.
How They Are Made Up
HOA members are elected from among the residents to take care of a variety of items. These may include maintaining the grounds, providing master insurance, selecting community utilities and managing overall finances of the community or buildings.
The HOA’s bylaws will spell out which responsibilities are the duties of the association, and which are that of the unit owners.
Making sure that you understand the difference will be key in helping you find a home with an HOA that fits your budget and needs.
The Costs
It will be important to ask your potential HOA about any costs that come with living in the community. Most HOAs will require all unit owners to pay a monthly fee.
You may also need to be financially prepared to cover one-time assessments for large community expenses.
Work with your local financial planner or accountant to help you build a financial plan for managing these potential HOA costs as you consider whether or not it makes sense to search for this type of community.
What to Consider
To help you find the right HOA for you, consider these tips from the financial support blog WiseBread.
• Attend a board meeting.
• If the association is professionally managed, meet with the manager.
• Check the association’s annual budget and make sure it’s accurate and balanced.
• Ask for a copy of the Reserve Study and take the time to understand it.
• Check the curb appeal closely in daylight and in the evening.
• Make note of any obvious deferred maintenance.
• Ask about the history of special assessments.
• Evaluate the transparency of the board and manager.
• Read the association’s rules and standards.