Is The HOA For You? The Ups And Downs Of Managed Living
By: John Garcia | Date Posted: October 25, 2021
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Is The HOA For You? Homeowners associations (HOAs) are one of the most prevalent forms of community organization in the USA. USA Today reports that between 25 and 27% of the US population live within one of these communities, likely the biggest slice of the population when it comes to anyone housing trend. HOAs can be controversial; every week seems to bring another headline story about how one HOA has acted, and how thatâs impacted both within that community and further afield. Getting the facts on HOAs, and knowing exactly how residents stand to benefit â or the opposite â is an important process that can help to smooth out the sensationalized stories. Itâll also help new homeowners in HOAs to understand the rules and what they can do with their property.
How HOAs operate
The origins of HOAs are quite simple as outlined by The Motley Fool. While residential development is still undergoing construction and hasnât yet reached full residency, the developer will often put into place a management company to help maintain the area through residency and smooth out disputes between residents. Itâs important to note that the main goal of an HOA is to maintain and raise property values â itâs a vehicle to ensure that homes contribute to positive home values. In exchange for this, residents pay a set monthly fee that is often stipulated as part of the sale.
Once the developer has moved out, residents will be given the opportunity to elect their HOA and then enlist an HOA management company to manage the development. This isnât a static factor; residents asking if they can, and if so, how to change HOA management company, face the relatively simple process of reaching a board decision on moving company. Everything about an HOA is relatively straightforward, as are the benefits it brings.
Improved property values
The bottom line of an HOA is the maintenance and improvement of property values. To this end, they have, in general, succeeded. This is true both when considered on the basis of the HOA alone, and also when compared to similar vehicles such as neighborhood associations (NA). A journal published by the Urban Affairs Review came to this conclusion, finding that HOAs increased property values while NAs only maintained them. The measures put in place by a vigilant and forward-thinking HOA can, therefore, improve the value of your home and ensure that it has resale value years down the line. If youâre not so bothered by potential resale and only want to maintain your asset, you may find other forms of community organization more beneficial. HOAs do have other aspects that benefit the resident, however.
Communal maintenance
HOAs are great for busy homeowners. A good HOA will conduct maintenance, ensure communal areas are fit for purpose, and will often help to bring amenities like public pools and gyms to the local neighborhood. These benefits are, according to Forbes, a major driver behind people staying in with HOAs. As with any form of community organization, there are drawbacks to HOAs and what their terms stipulate â these rules, and laws, are often what become the subject of news pieces and gain viral notoriety around the country.
Draconian rules
HOAs have the right to set various rules that they believe will be conducive to house prices. That can impact your control over such factors as flying flags, whether political or not; where you park your car; the length of your grass and other plants; and the ornamentation in either your front or back yard. This can, obviously, lead to wide-ranging disputes.
HOAs will also enforce debt collection and, in agreement with the HOA contract, can pursue foreclosure on your property if debts have accrued regarding your HOA fee and related costs. The impact of this has been seen on several occasions; WFTV highlighted one HOA that issued a lien against a homeowner following an administrative error concerning non-payment of fees that was then not investigated thoroughly. Importantly, not every HOA is like this â most get about their business in a sensible fashion. However, mismanagement can create huge stress, potential financial problems, and, as one example shows, potentially deadly consequences.
Terrible consequences
The result of HOA over-management can result in disastrous consequences. The tragic collapse of Miamiâs Champlain Towers South condo was linked at least in part by USA Today to the arguments rumbling between HOAs, developers, and condo owners. With repairs sorely needed, the extreme focus on property value and the disruption construction could bring to that led to significant delays that are, to date, being investigated. This is an important thing to consider. If your home is in a state of disrepair and you need to make urgent repairs, it can often be accomplished without too much hassle â but some HOAs may fight back, either to prevent construction on the residential estate or to try and keep tight control over what is or isnât built. Conformity is often important in HOAs to maintain the picture of the development and maintain the house prices associated with that.
Is The HOA For You?
The key to getting it right is finding an HOA that works for you. You need to be surrounded by like-minded people that are there to enforce the rules in an even-handed way that is pursuing the ultimate goal â the improvement of property prices, and overall community cohesion. Thatâs only achievable with a little research. The most important factor is research â look up the HOA before you get involved, make sure itâs one with a good track record, and make sure you hold them accountable for it. In a healthy HOA, homeowners can expect a good range of community benefits that tie in with a natural accrual of property values over the years of their ownership. Thatâs something any homeowner can get behind. Like everything else in life, your experience will be as good as the people involved.
Thank you for reading!
