Article Courtesy of USA TODAY
By Janna Herron
Published August 11, 2019
If you’re on a house hunt now, there’s a good chance you may
end up finding your dream home within a community association.
About 25% to 27% of the U.S. population lives in a community association –
whether a homeowners, condominium, townhouse or co-operative housing association
– according to the Foundation for Community Association Research. In all, there
are about 347,000 community associations with 73.5 million residents in the U.S.
These associations are generally tasked with coordinating the upkeep of the
common property of a building or planned or gated community. They do this by
charging fees or dues and possible assessments to perform necessary repairs.
Of course, not all HOAs are created equal. Some are well-run and well-funded by
a competent board and savvy management company. Others may be plagued with
infighting, costly upcoming repairs or nosy busybodies.
“Some people love it, some people hate it,” says Bryce Pennel, a real estate
agent with Coldwell Banker in Beverly Hills, California. “It’s partly who you
are and what triggers you, if you like to do things solo or as a group.”
Here are the pros and cons of living within a homeowners association, or HOA.
Pros of HOAs
Amenities: Many neighborhoods with homeowner associations come with community
amenities, such as pools, tennis courts, playgrounds or fitness centers that
members in good standing can use, possibly saving them money on gym memberships
and the like.
Maintenance: The major benefit of HOAs is that they take care of the common
grounds, so you don’t have to. That can be landscaping, roads and other common
areas. They are also responsible for getting necessary insurance for community
areas like pools and playgrounds.
Ownership: If you’re unhappy with your HOA board of directors, you can always
run for the board and help set the agenda for your neighborhood. In that sense,
you take ownership of your community along with your house.
Cons of HOAs
Dues: HOA dues, which can be charged monthly or yearly, increase the cost of
living in a neighborhood or building run by an association. In Beverly Hills,
some of the luxury condos can charge up to $3,000 extra a month for dues, Pennel
says. Overall, though, HOA fees are typically in the low hundreds of dollars.
Part of your dues goes to paying monthly expenses, while the remaining funds go
into a reserve pool for bigger repairs or replacements down the road. Your HOA
dues may also cover costs you would otherwise pay for yourself if you didn't
live in an HOA, says Vanessa Beneze, a real estate agent with Century 21 Frank
Frye Real Estate in Licking County, Ohio.
"If the HOA is covering utilities, water and trash, then it can be a pro,"
No matter what your dues cover, it's important to pay them on time. If you get
behind without setting up a payment plan, the HOA can foreclose on your
Assessments: If the HOA doesn’t have deep reserves and an unexpected but
immediate repair comes up, all homeowners in the association may be charged a
one-time assessment to cover the cost of the repair. Depending on the expense,
this could take you and your wallet by surprise.
Rules: Another drawback is the rules that the association sets for the common
facilities as well as factors affecting your home and habits such as proper
garbage can etiquette and approved paint colors or roof tiles, especially if
you’re in a designated historic district.
If you want to renovate your house – especially if you own in a unit in a condo
building – you may need to submit your plans for approval by the HOA before
“These rules, in general, are put in place for everyone’s best interest,” Pennel
says. “But when told there are rules, people can get frustrated.”
What to look for in a HOA
Before buying into an HOA, do your due diligence. That includes looking over the
HOA’s covenants, conditions, and restrictions, or CC&Rs. There, you should find
the community’s rules and regulations as they apply to your home and the
community as a whole.
You should also get a peek of the HOA's finances to see if it has a healthy
reserves fund for emergencies. Ask for the minutes from past annual meetings.
These aren't always easy to get, says Beneze, who habitually puts it into the
contract that her buyers get to see the minutes before closing.
Beneze also recommends asking those who live in the neighborhood about the HOA
and how it’s run. You may get the most honest answers from people not interested
in selling you a house.