You might have come across with many unfamiliar terms and features related to real estate while trying to buy or sell a property. What about Homeowner Association or HOA? Is it your first time hearing it?
What exactly is HOA and why is it so important for people who are looking for a new house? Why should a buyer be concerned about HOA? These might be some of the questions that will be going through your mind right now. Isn’t it? Then, let’s decode this term together.
What is HOA?
HOA or Homeowner Association is a non-profit organization for a small group of community who are living in a particular area. It is an association of homeowners who reside in an area either constructed by a real estate company or any other organization. It functions as a community and once you buy a house inside that area, you become a member of the community. HOA will be managed by the people who are residing in the area itself. They create a board of members who voluntarily take up the job to oversee the functioning of the community. The financial resources are collected from each member of the community.
HOA will have rules and regulations approved by the board and it can vary from one HOA to another. The rules for one HOA may not be the same for other. The community should abide by the rules set up by HOA and ignoring any one of the laws can get you in real trouble.
Advantages
No drop in the value of the property
The properties in HOA will have a consistent value at all the time. There will not be any drop in the value since the properties are well maintained by the management. That’s why people prefer a home in HOA rather than in places without an HOA.
Maintenance or dispute settlement
You do not have to worry about any repairing work or maintenance at your home while living in an HOA. The management will help you with all the maintenance work. They will have separate provisions for such matters.
Access to certain facilities
The HOA will have a common pool, playground, gym, recreational institutions and many other such facilities. The members of HOA will have easy access to such facilities which the non-members find difficult to afford.
Disadvantages
Need to follow rules and regulations
While living in a HOA, you are supposed to follow certain rules and regulations set up by the board members. Violating any of these rules can get you into difficult situation. The association can ask you to move out from your house in such cases.
Cannot renovate the property
You cannot make any changes or modifications to your house in a HOA. The association will give guidelines about house interiors, which colors can be used for painting the house etc. Renovating the property according to your taste is not possible while living in HOA.
Pay fees monthly
You need to allocate a particular amount of money monthly for the smooth working of HOA. The HOAs are managed by the total co-operation of the community. So, it is the duty of the residents to contribute a monthly amount for the working of it.
What’s your thought now? Wish to live in a HOA? But remember one thing. Read the terms and conditions of the HOA carefully before moving to the area so that nothing go wrong after shifting.
