Does This Subdivision Have a Homeowners Association?
Drive through a subdivision where the grass is cut, shrubs trimmed, and nary a piece of trash or visible eyesore can be seen and buyers perk up and want to see more. Conversely, travel through a community that looks unkept and rundown and you will typically get the opposite response. In both circumstances, a frequently asked question I hear is “Does this subdivision have a homeowners association?”.
What does that mean and what are the downfalls and benefits of an HOA community? Let’s take a look and see…
What is a Homeowners’ Association (HOA)
In short, HOA stands for Homeowners Association, however, anyone who has been a part of one or resided in a neighborhood that had an HOA knows it entails quite a bit more.
A private association, HOA’s are becoming more and more popular throughout cities in the United States.
An HOA is normally a non-profit organization established by the real estate developer and handed over to the community upon development completion or after a percentage of homes are built.
The HOA provides rules regulating maintenance of common areas and enforcement of deed restrictions (filed with the property records). The HOA is the go-by for the subdivision do’s and don’ts.
A copy of the Covenants, Conditions & Restrictions (CC&R) will be provided to buyers at closing.
So now that we know technically what HOA stands for, there are probably a handful of follow-up questions you may have.
Let’s take a deeper look into homeowners associations and what they mean to you as a buyer.
Some Homeowners Association FAQs we are going to dig into in this article are:
- Who starts an HOA?
- What does an HOA do?
- How much does an HOA cost?
- Does this subdivision have an HOA?
- What can a Homeowners Association control?
- What are the features of an HOA?
- What are the advantages of an HOA?
- What are the disadvantages of an HOA?
- What happens to Homeowners Association rule breakers?
- What if I don’t pay my HOA fees?
The key is to have a homeowners association strategy that takes all available details into account, providing you with the best information to make the correct choice based on your needs.
Who starts an HOA?
Homeowners associations can be started in a few different ways, however, most times a developer will begin a homeowners association after they have created a new community.
Many new developments throughout the United States are now offering shared common spaces, neighborhood amenities and special community features.
This is an attractive addition for developers to offer, however, they do need to be maintained and managed by someone.
In an effort to enforce rules and regulations and keep housing standards high, homeowners associations were introduced.
What does a Homeowners Association do?
You may be asking yourself what the point of a homeowners association is. As mentioned briefly above, common day homeowners associations were introduced as a way of keeping new subdivisions and development rules enforced.
The organization is meant to do more than ensure regulations are followed, they are also responsible for the maintenance of common areas such as green spaces, parks, recreation facilities and more.
Many HOAs oversee services such as gardening, trash removal, lawn maintenance, snow removal and more.
Depending on the type of community one resides in, there may be additional amenities such as parks, multi-use sports fields, and pools.
Those who serve on the homeowners association board attend meetings, typically monthly, to manage financial records, discuss day-to-day operations, and create annual budgets. These individuals, almost always volunteers, are elected homeowners within the community.
For new communities or communities who do not have experience with homeowners associations, an HOA Manager can take over operations.
An HOA Manager is a company that essentially acts as the board of directors handling all the aspects of the association.
Often there will still be a separate board of directors made up of neighborhood residents, however, their tasks will focus more on urgent community matters versus financial and legal aspects.
How much does an HOA cost?
Homeowners association fees are about as varied as neighborhoods themselves. There is no set fee and depending on location (i.e. city, area, etc.) the prices can range drastically.
An estimate for a “typical” subdivision can be anywhere between $100 – $700 a month.
The major influencing factors which affect the cost include the style of the subdivision (condominium community, townhome development or single-family neighborhood, for example), size of the community and amenities offered.
For example, in my area, Houston County GA, the average cost is typically around $100-$200 per month but can be much higher if premium community amenities are available. If you are planning to buy a condominium in Ocean City MD, you might have to spend around $200/month. However it could be 2X more in Potomac, MI.
The point is, costs may differ based on location, amenities, and even responsibilities of the HOA.
Does this Subdivision have an HOA?
It is entirely possible your subdivision has an active HOA. How do you know for sure? Here are some common places you can check:
- The developer or on-site sales team. If homes are still being built, they will know.
- Local clerk of courts or the courthouse at the county seat. HOAs must record their CC&Rs.
- An experienced local Realtor. If they closed a home in this subdivision, they most likely have the information.
- A real estate Attorney. They handle a lot of closings and could know.
- Do a Google search. Many subdivisions have community websites and the HOA information is often available.
- Check with homeowners in the subdivision. This is less awkward if you know someone in the community in question.
- In Georgia, you can also check with the Georgia Superior Court Clerks’ Cooperative Authority
- U.S. wide, another online resource is Community Associations Institute.
Utilize all available resources to not only answer the initial question, “Does this subdivision have a homeowners association?”, but also to ensure you are well prepared if you decide to live in a neighborhood, community, or subdivision that has an HOA.
What can a Homeowners Association control?
While a homeowners association does have a significant amount of say when it comes to the community, there are some limitations as to what they can and cannot do.
As emphasized above, each homeowners association is unique and abides by their own set of rules, however, there are some common regulations found in most organizations.
Landscaping: Part of the attraction of living in a community with a homeowners association is the rules and regulations in regard to landscaping.
Residents not only want to ensure that their property values do not plummet due to a dilapidated home, they also enjoy the sight of well-manicured lawns and beautiful curb appeal.
Some associations go beyond simply ensuring lawns are routinely cut and bushes trimmed, there may be restrictions on what types of plants, flowers and trees are allowed and where they can be planted.
Rentals/Leasing: Though commonly found in vacation cities and resort towns, restrictions on short (or even long) term rentals and leasing may be in place.
There are a number of reasons why these stipulations make their way into the regulations, and for many, it’s a welcome restriction.
With the popularity of Airbnb and the likes, residents, especially full-timers in a vacation destination, enjoy the calm and quiet that comes with steady homeowners.
So, if you are an investor looking for a property to rent, make sure to check the rules carefully!
Parking: Many homeowners associations will place restrictions on the type or number of vehicles that can be parked in the neighborhood.
Most commonly, these restrictions refer to the likes of commercial vehicles, RVs, boats and trailers.
Not only can these large vehicles be unsightly, they can also cause issues if parked for extended periods of time in common spaces or on roadways.
Depending on the type of community, parking availability may be an ongoing issue. Condominium buildings may have designated parking spots, which are reserved for residents. Homeowners associations may use city by-law officers or private services to enforce parking eligibility for owners and guests.
Exterior Renovations: Before you plan on a total redesign of the exterior of your home, you may want to thumb through the HOA rules and regulations. Many times new developments only offer a certain set of housing styles, which are complementary to each other and flow together aesthetically.
Often times HOAs strictly enforce rules in regards to the structure and appearance of homes, allowing for little wiggle room when it comes to creative freedom. Not only does this mean one can probably kiss that fire engine red door goodbye, that can also affect the style or type of fencing, clotheslines and pools.
So, before you have your heart set on a design change, or even a simple outdoor renovation, it would be prudent to obtain written approval from the board.
Exterior Decorations: If you are the type of person who deems it unnecessary to take down Christmas lights, because hey, they will just need to go back up again, living in a neighborhood governed by an HOA might not be for you.
While not as common as other HOA rules, there are a number of subdivisions throughout the country that have regulations on how early one can decorate their home and how long before decorations must be taken down.
Many associations have strict rules for acceptable decorations, which also includes a timeframe for which they must be removed. Not only is timeframe a factor, certain communities will also have stipulations on size and style permitted.
Animals: As a way to ensure community cleanliness and resident safety, certain homeowners associations will have regulations on pets. Many times, the rules are generally just common courtesies such as cleaning up after your pet and keeping them leashed unless it is a designated off-leash area, like a dog park.
Other times, stricter rules are in place, which can dictate the size or type of pet allowed. Mostly, these tighter restrictions are found in condominium buildings versus single-family neighborhoods.
Noise: Though many cities and towns have their own rules on noise, homeowners associations may impose additional restrictions on residents. Generally reserved for the late evening and early morning hours, noise restrictions can be enforced by homeowners associations during specific times.
Now that we have taken a glance at what homeowners associations are able to do, it is also important to know what they legally cannot do. Residents should be aware that homeowners associations are governed by the rule of law, regardless of what the board of directors says. HOA can not:
Cannot kick you out: Under no circumstances does a homeowners association or board of directors have the power to remove you from your home. Regardless if you are the homeowner or a tenant, HOAs do not possess the power to evict.
However, they can put a lien on your home and that lien must be paid before you can refinance or sell the property.
Discriminate: Thanks to the Fair Housing Act, homeowners associations cannot discriminate against any group as identified in the act. Therefore, regardless of race, gender, sexual orientation, religion and ethnicity, you are to always be treated equally and fairly.
Change rules/fines without proper process: There are certain avenues that must be followed when an HOA wishes to amend the rules and regulations. Not only does it need to be addressed in public meetings and provided in writing, residents have the ability to vote on certain decisions and object to changes.
What are the features of an HOA?
They can be very restrictive with the HOA Board ruling with an iron fist, lax and easy going, or someplace in-between the extremes.
While there is no set standard list of rules they must adhere to, here are some common features that HOAs have:
- Mandatory membership and a fee is charged (monthly, quarterly, or annually)
- Approval from HOA Board before structural changes are made to the property
- Enforced exterior maintenance standards (community landscaping/security contracted by HOA Board)
- Common area use (clubhouses, exercise facilities, pools, etc.)
- Commercial use of property
- Storage of boats, RVs, or work vehicles
- Erecting a tree house or basketball hoop
- Fence, landscaping, and paint restrictions
- Street parking
- Number of pets
- Age restrictions
What are the advantages of an HOA?
There are plenty of perks that come along with living in a community that is governed by a homeowners association. Here are a few:
Well-manicured lawns, pleasing overall aesthetics, ample amenities, additional services and more are just a few of the major draws. Many prospective homebuyers enjoy having a clear set of rules which govern the neighborhood.
Property values are not jeopardized, regulations are enforced and property owners know what to expect.
What are the disadvantages of an HOA?
With the good comes the bad. There are disadvantages of homeowners associations, especially for anyone who has big dreams of living in a brightly painted house (unless of course your HOA allows it!).
Along with the obvious drawbacks, such as restrictions on creative expression, little things like not mowing your lawn or having a basketball hoop visible from the street can become a nuisance over time or could even result in fines.
Forgetting to take down decorations on time, not being able to plant a tree or shrubs wherever or the additional cost of the monthly fee can be a quick reminder of the downside of homeowners associations.
What Happens to HOA Rule Breakers?
That depends on how strictly enforced the CC&R rules are. HOAs have the ability to generate fees, fines, solve minor disputes, or take homeowners to court for serious
(and often repetitive) infractions. Follow the rules if you live in an HOA subdivision and issues should not arise.
Remember, owning a home is an investment and doing your part to keep the subdivision looking nice will help keep property values UP.
For the vast majority of homeowners living in an HOA subdivision or community, the experience is nearly transparent.
Potential buyers need to weigh their options on HOA living and determine if the guidelines and enforcement of those HOA rules are a good fit for their values and lifestyle.
What if I don’t pay my HOA fees?
Depending on the homeowners association and the set out rules and restrictions, there are a number of things that can happen when fees are not paid.
Typically, things will start out slow, with a late fee notice here or a “due immediately” letter there.
After time goes on, if no further fees are paid, homeowners associations are able to restrict residents on their use of common elements and amenities.
For example, if fees remain unpaid, privileges such as pools, gyms, clubhouses and parks may be revoked until the account is settled.
If payment is still not made, further action may be taken and can be significant, which could include a lien on the property.
In extreme cases, some homeowners associations are able to file for a foreclosure to collect payment.
Homeowners associations base their annual budgets on the ongoing payment of monthly fees, and as such, consistent late payments or lack of payment can have an adverse effect on the community as a whole.
Final HOA Thoughts
Regardless of whether or not living in a community with a homeowners association is right for you, the concept offers both advantages and disadvantages.
The best course of action when considering a home that falls under an HOA is to carefully wade through the paperwork, ensuring you are fully aware of all rules and regulations before making your final decision.
For many people, a homeowners association is an additional layer of comfort as its ultimate purpose is to ensure a clean, well-kept neighborhood that runs smoothly and elevates the lifestyles of those who call it home.
For other people, an HOA is to be avoided at all costs. Fortunately, many communities around the country have a variety of choices to meet the needs of most consumers.
Just remember that HOA guidelines may differ based on locale. All the more reason to understand the HOA rules and regulations for the specific communities you may want to live in.
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