How Having an HOA Could Carry Both Benefits and Cons
Hi! It’s Ben Grise from Ben Buys Indy Houses.com. Today we’re going to take an in-depth look at how having an HOA could carry both benefits and cons. While there are lots of pros a homeowner might benefit from, there are some cons to look out for. HOA is short for Homeowners Association, and is basically an organization created by members in the community. They have the goal of maintaining a neighborhood to a specific standard in order to ensure all residents can enjoy a well-maintained environment. As well as protect property values, and ensure the safety of all the residents. While some cities regulate HOA, others allow the HOA organizers freedom over their rules and regulations, and subsequent consequences for violating HOA standards. Some new neighborhoods come with a HOA, while some HOAs are formed in established neighborhoods where there previously wasn’t one. Be sure to read any HOA bylaws well before signing anything, as some of these consequences can be severe. We’ll talk more on that later.
Pros of having and participating in an HOA
- One pro of an HOA is neighborhood maintenance may be taken off your hands. HOAs collect fees, called dues, from every member. These dues are usually allotted to maintenance of common areas in the neighborhood. Your HOA dues may not pay for your driveway to be plowed in a snowy winter. However, the sidewalk in front of your home may be shoveled. Any common-use areas such as pools, clubhouses, walking paths, parks and more within the neighborhood will be maintained. While HOA fees vary depending on the size of the neighborhood, the amenities offered, paying a single HOA fee may be a reasonable expense for the neighborhood perks and the worry-free convenience it offers.
- HOAs, in theory, help protect property values by enforcing community standards to individual homes. Most HOAs have a list of rules and regulations regarding the appearance of the homes in the neighborhood. These could include guidelines on grass trimming, plants and trees, fences, house paint colors, whether cars can be parked in the street, and more. By enforcing fees and other measures to residents who don’t comply, HOAs motivate residents to maintain a standard of neatness and uniformity in the community. Likewise, if you own a property with a view, HOAs may regulate the size and height of any fence allowed in the neighborhood to avoid any resident losing their vantage point. This is a big pro to an HOA, as it works to protect your property value. Lastly, according to IBC Properties, HOAs can help mediate neighborhood disputes.
Cons to having an HOA
- The fee to an HOA is fixed. Your income might change and you can reduce expenses in other ways, you can’t stop paying your HOA dues. Opting out of HOA fees is not an option. Unless the HOA is dissolved, you will have that expense. If an HOA disbands only to have a new HOA form, the regulations may change and previously allowed items may come under violations of the new standards. It will be up to you to make your case to the HOA to uphold existing items such as basketball hoops. If you plan to make additions to your home or add a playground, not only do you have to clear your plan with the city codes, you have to seek HOA approval before beginning your project. The extra work involved in complying with HOA standards is a definite con.
- As the blog by real estate attorneys Peyton Bolin points out, those fees are subject to change. If an HOA runs out of money, they can ask for more. The amount they can take from each resident may be in the contract you’ve signed with them. Additionally, penalties for violating HOA rules can range from fines to house foreclosure. Be sure to read the bylaws well, because refusing to pay a disputed fine could allow an HOA to make a claim on your property for the amount owed. Many homeowners feel that signing over the right to foreclose on their home is a con.
Sell Your House For Cash
There are many reasons why a homeowner may find an HOA both attractive and restrictive. If you are considering purchasing a home with an HOA or establishing one in your neighborhood, be sure that you understand exactly what you’re agreeing to. Once the HOA is formed and you have a contract with them, homeowners have little option but to comply with the regulations and penalties. I’m Ben Grise, and I hope you’ve enjoyed this post. As an accredited home buyer in the state of Indianapolis, I strive to offer professional, trustworthy service to my clients. Be sure to stop by my site and read my tips for homeowners looking to sell their homes. If you’ve thought about selling your house, please take a moment to watch this video from one of my satisfied customers. Our team is truly committed to helping homeowners achieve their goals by providing honest, reliable service.