December 08, 2020
Categories: Tools
While shopping for a new home neighborhood you will most likely encounter the term “HOA fees.” For a condo or townhome community they may also be referred to as a regime fee. HOA stands for Homeowner’s Association and these are fees paid by homeowners living in planned communities to an outside organization that is hired to maintain and improve the property. Most often this pertains to common areas and amenities. It is something you would not necessarily think about… who mows the grass in the common area, maintains the landscaping at the neighborhood entrance and keeps the pool clean? That all falls under the realm of what you are paying for with your HOA fees. If you are shopping for a condo or townhome, this would apply to any shared central indoor space like lobbies and elevators and outside elements such as pool and landscaping.
The money you pay, either monthly or annually, is typically allocated into operating and reserve accounts. Occasionally, HOA’s or condo associations will levy a special assessment. This assessment is an additional monthly fee to be paid by homeowner’s in the case there are not adequate funds in its’ reserve. Special assessments typically go to pay towards a large repair or investment like a new roof (in the case of condos) or a community amenity in single-family housing developments.
Homeowner’s Associations also typically establish the Covenants and Restrictions for a neighborhood. These guidelines set rules for a variety of aesthetic aspects of the neighborhood such as type and size of fencing, structures you are or are not allowed to build, limitations to on street parking, etc. They can also be specific (particularly in multi-family dwellings) as to approved breeds of pets. The Covenants and Restrictions outline any fines that can potentially be levied for violation of these rules. Upon completion of all the homes in a neighborhood the HOA is typically comprised of homeowners from the neighborhood and meetings and minute meetings should be accessible to all neighborhood residents. These meetings afford homeowners the opportunity to voice opinions and implement change.
When comparing neighborhoods HOA fees are important to keep in mind. One must factor these fees into one’s budget since they are a required amount you will be paying in addition to a mortgage payment and homeowner’s insurance. It is essential to make sure you can afford to pay your dues and pay them on time. In extreme cases, neglecting to pay HOA fees can result in a lien against property or foreclosure proceedings. Be sure the neighborhoods you are considering have fees that seem reasonable to you; they will be paid by all homeowners, regardless of whether you use the shared amenities. Feel free to ask the onsite sales agent questions regarding the community’s Covenants and Restrictions, it is far better to know and understand what restrictions are prior to buying a home rather than after the fact. If you’re shopping for condos or townhome, feel free to ask the onsite agent questions about the balance of reserve funds and if there are any planned upcoming assessments.
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12.20
Categories: Tools