Homeowners Associations: Pros and Cons

What is a Homeowners Association?

A Homeowners Association (HOA) is an organization that manages homes and residents in a community by setting rules and guidelines and having common areas for the community. Some common rules in HOAs include what color the exterior of a home can be painted or how many cars can be parked in front of a property. Popular common areas include swimming pools and gyms.

HOAs have become increasingly widespread over the years. Approximately 80% of new subdivisions are governed by HOAs, and there are more than 350,000 associations in the United States. Some people have very positive feelings about HOAs, while others would prefer not to live in an association. If you are considering purchasing a home, it is important to know the pros and cons of an HOA.

The Pros

  1. Higher Property Value.

According to researchers at the University of California at Irvine, homes under an HOA sell for roughly 4% more than comparable homes outside of an HOA. This can be attributed to curb appeal, community uniformity, landscaping, and a generally attractive neighborhood.

  1. Amenities.

Each HOA can offer different amenities, but many HOAs offer amenities such as swimming pools, tennis courts, golf courses, gyms, clubhouses, and playgrounds within the communities. These amenities are exclusive to residents in the association and do not have to be maintained by the residents. In addition, some HOAs host community events including block parties, yard sales, and pool parties.

  1. Additional Services.

Many HOAs offer services such as landscaping, snow removal, and garbage collection. This means that companies are hired to take care of each property to maintain uniformity and an appealing look.

The Cons

  1. HOA Fees.

The most notable con for HOAs are the fees, sometimes known as dues. Each HOA differs in the amount that they charge, but it is generally a few hundred dollars every month in addition to a monthly mortgage payment. These fees are used for some of the perks listed above such as amenities and additional services. However, when looking for a house within an HOA, it is important to be aware of budget and how HOA fees may impact that budget.

  1. Restrictive Guidelines.

A main drawback of living in an HOA for many people are the rules and guidelines. These rules and guidelines are generally in place to maintain consistency and curb appeal throughout the residential area. While this can differ for each HOA, some common rules include the need to seek approval for exterior renovations on your home, keeping your outside garbage can out of public view, and maintaining a clean sidewalk or driveway. Some people may find the rules or guidelines of an HOA too restrictive.

  1. Consequences for Violations.

If a violation occurs, you may be punished by the HOA board. The most common form of punishment is a fine and notice to solve the problem that is causing the violation.

It is important to be aware of the pros and cons of HOAs to make the most informed decision when purchasing or renting a home. At Waugh Grant, our attorneys know how to navigate HOAs, and their related associations, Condominium Associations and Property Owner Associations. Our attorneys have experience creating them, representing them, and even litigating against them. Please contact info@waughgrant.com for a consultation.

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Christian’s practice includes litigation, appeals, real estate, government and municipal law, and a full range of business law matters. He is Board Certified in Real Estate Law.
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Gerrard’s practice includes corporate and business law, tax and tax controversies, wills, trust, and estates, and outside general counsel services. He is Board Certified in Tax Law.
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