Facts You Need to Know about Home Owner’s Association

There are downsides to living an a community governed by the home owner's association

Facts You Need to Know about Home Owner’s Association

Homeowners Association Fees- Good, Bad and Ugly

In simple terms a HOA is a non-profit corporation comprised of all the property owners in a development(s). The owners typically higher a property management company to manage the association. The HOA elects a board of directors who works with the management company. The developer of the project typically creates the association documents, by-laws, and CC& R’s before the project is built and will manage and run the association until the development is a certain percent complete. The Board is the voice of the association and will work to follow the association governing documents. Often I hear people talk of the association in an adversarial way. Based on my experience, it seems a lot of property owners have an, us against them mentality. Where in reality all the homeowners are part of the association and can and should have a voice. In most cases people do not have the time to get involved they leave it up to the board to make all the decisions. Individuals on the board are elected volunteers and typically have other full time jobs. They will vote on key items and conduct the business of the HOA, typically acting on the advice of the management company. The key here is the management company. The board has a duty to its members to make the sure the management company is doing its job. HOA’s govern various types of developments and are not limited to condo and townhome developments.
HOA rules are famous for their insistence on conformity and keeping their community in nice, neat little homogenous rows.
The Good:
We’re not here to claim that every single HOA sits at Satan’s right hand. In theory ? and in reality in some places ? the fees are a fairly innocuous presence that does contribute to the overall upkeep of the neighborhood.
? Enforcement of rules to keep the neighborhood in good condition
? Typically higher prices than nearby neighborhoods with an HOA
? You don’t have to talk to your neighbor about his car on blocks
The Bad:
? Rules you don’t like ? Fines for breaking the rules.
? Assessments when there is a budget shortfall for maintenance (roofs, siding)
? HOA lawsuits will hinder sales in the development as lenders don’t want to be effected
by the unknown
? Paying for amenities that you don’t use
? HOA’s may foreclose if you don’t pay. The Ugly:
What happens if you decide the infraction you’ve been fined for is silly and you don’t want to pay it? Be careful. Be very, very careful. There have been cases where fines were allowed to mount into the thousands and tens of thousands of pesos until a vengeful HOA board placed a lien on the property and eventually foreclosed on the basis of unpaid fines. Don’t laugh. It can happen. It HAS happened. The message here is to take the prospect of joining a home owners association quite seriously and be absolutely sure you can live with the rules. If not, keep on searching and don’t even think about buying in that neighborhood.

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