Understanding The HOA Rules For A Planned Community
The allure of living in a planned community with a homeowners' association (HOA) is pretty understandable, especially if you live in a state like Florida or California where such communities are plentiful.
On the surface, there are plenty of benefits to living in an HOA community. The most obvious benefit is that the HOA strives to keep the property values of its members high by maintaining an attractive community appearance. For example, in many HOA communities, there is often added security, such as gates or guards at the entrance and attractive community facilities like swimming pools, tennis courts and on-site gyms. Sometimes, an HOA will also take care of yard maintenance and utility upkeep.
The major downside to joining an HOA, other than having to pay monthly or annual fees, is the strict rules that are often imposed by the HOA. HOA rules can regulate everything from property and lawn maintenance to how many cars can be parked in a driveway and how tall a mailbox may be. The plethora of rules may feel confining to some. However, supporters of HOAs argue that these rules result is a universal standard of maintenance and appearance that ensure high property values for the HOA community.
Here are a few common HOA rules to keep in mind when deciding whether to go HOA or not.
Paying Your Dues
The benefits of living in an HOA community are funded by the dues paid by all homeowners in the community. These dues, which are paid monthly or annually, can range from as little as $20 to upwards of $1,000 per month depending on the services and amenities offered. It is important to keep in mind that HOA fees are not tax deductible.
Because they are a recurring monthly or annual expense, HOA fees should definitely be factored into the budget for a future home purchase. You should also plan for the fees to increase over time, sometimes with little warning. Prospective homebuyers in an HOA community should get the scoop on how increases are voted, how often they have increased in the past and how much cash is available in the community's reserve fund.
Landscaping And Gardening Restrictions And Requirements
Many HOAs have a list of certain plants and flowers that they do not allow members to plant. Others have restrictions on when you can water your lawn or requirements on how often you must water your lawn. Finally, some HOAs require that you redo your landscaping periodically so that your home’s aesthetic appeal doesn’t get stale.
Some HOAs restrict the type or size of pets allowed in the HOA community. If you are an animal lover, you should ask about any pet restrictions before signing on with an HOA.
Looking To Rent Or Sell? You Might Have To Check With The HOA First
Some HOA communities also have rules pertaining to residents who want to lease or sell their property.
TheMoneyCoach writes: "Homeowners looking to rent out or sell their residences may need to have the new potential occupant screened and approved by their HOA board. The HOA can even regulate how much you charge for rent and on what days or times of year the occupants can move in."
And speaking of selling, it may add some difficulty to the process of selling your home if your HOA forbids displaying "For Sale" signs in your yard and restricts entry to your community. Often, prospective homebuyers have to hook up with a real estate agent in order to gain access to the HOA community to view properties.
Pay The Dues Or Face Possible Foreclosure
Depending on the state laws where you reside, your HOA may have the power to "put a lien on your home or force a foreclosure on your property if you do not pay your HOA dues within a set time frame," writes TheMoneyCoach. "And if you fight them in court and lose, you might have to cover the HOA's legal bill."
The bottom line is that once you sign a contract with an HOA, you authorize the HOA to enforce its rules through fines or private lawsuits.
Failing to pay your dues or the fines imposed by the HOA can result in foreclosure. For example, according to report by National Public Radio, "in 33 states, an HOA does not need to go before a judge to collect on the liens" that they impose on homeowners who come up short on paying their HOA dues.
The key to not regretting your decision to join an HOA community is to fully understand all of the rules and regulations before you sign the papers. Therefore, you should always ask a prospective HOA for a copy of their rules. Knowing what you are getting into ahead of time will help you to avoid a potential nightmare down the road.