7 Things to Know About Homeowners Associations
Did you know that around 80% of newly built homes belong to a homeowners association (HOA)? Planned communities are on the rise, but what does it mean to live within one of these neighborhoods?
What is an HOA, and what does an HOA do? Keep reading to learn all about homeowners associations here.
What is a Homeowners Association (HOA)?
A homeowners association (HOA) is an organization within planned communities or townhouse and condominium developments. HOAs oversee the properties in their jurisdiction and create and enforce communal areas and member’s properties. In this way, your investment is protected and even causes an increase in home value.
Fees Range Widely
When joining an HOA, you have to pay a particular set of fees. HOA fees are paid monthly to support community maintenance, civic amenities (sanitation, recycling, and some utilities), access to facilities (residential pool, gym, clubhouses, rec center, etc.,) and other expenses.
Some communities also cover lawn care, snow removal, and pest control for tenants with HOA fees.
These fees can range widely depending on what the HOA offers, type of home, location, and size of the community. On average, payments range from $200-$300 for single homes.
Additional Fees May Apply
Standard HOA fees included in your contract do not tend to change. However, you may be subject to pay additional fees. HOAs may charge for special assessments to pay for renovations in the neighborhood; some renovations (and charges) are unexpected, so it is best to add this to your budget.
Other fees you may face are fines. When you sign the contract, you agree to comply with those rules. If you violate an enforced regulation, like excessive noise or unapproved design changes, you could receive a warning or fine.
HOAs provide insurance coverage and liability protections for communal properties in their jurisdiction.
Regardless of whether you make use of amenities like a fitness center or parking garage, you are still responsible for paying the HOA “master policy.” Master policies may protect aspects of your home but still need a personal plan for your condo or home.
Fees And Your Mortgage Approval
The fees you pay to an HOA may impact your mortgage qualification abilities. Lenders consider these fees when determining whether you will be able to pay back your loan.
Your DTI (debt to income) ratio may lower your offers or approval odds.
The HOA’s Reputation
Is an HOA bad? Is an HOA good?
HOAs tend to get a bad rep due to poorly managed organizations, overly strict guidelines, or lack of communication. There are plenty of positive aspects of belonging to an HOA; however, you should always read any paperwork in detail and consider whether you can afford the dues and additional fees before joining a community headed by one.
Compliance With The HOA
Rules and regulations are outlined in a Declaration of Covenants, Conditions, and Restrictions (CC&R).
CC&Rs let tenants (or prospective buyers) know about membership dues when payments are made, your rights as members, and the limitations. As HOA, you have to comply with restrictions on paint colors, the state of your yard, and so on.
What Are The Amenities, Parking, and Pet Restrictions?
HOA amenities are often limited to members who pay for those services (with HOA fees). Parking is commonly restricted to certain vehicles, where to park, or how many cars per single home.
Lastly, pets may be restricted to one or two per household, specific breeds, weights/sizes, and enforce leash and collar rules.
Consider These 7 Things Before Making Your Decision About Homeowners Associations
The benefits of joining a homeowners association are plentiful. Consider the fees, insurance, regulations, and restrictions when making your decision whether or not to join a neighborhood with an HOA. Want to know more about your home buying options in Salt Lake City?
Contact us here or check out our blog for more information about moving to SLC, Utah.