So you’ve found a great property for your family, in a fantastic location, well within your budget and financial projections, everything seems so perfect right? You are ready to secure your dream home and move right in. That is beautiful, but aren’t you forgetting something? Yes you are; that is finding out about the HOA or home owners association, its rules, policies, fees and obligations which directly affect property owners in that location.
Over 55 million Americans live in a planned development overseen by a community association.
Living in a planned development or in a gated community comes with several profound benefits and advantages which include but are not limited to; groomed landscape, maintenance, security, fitness center, swimming pool, clubhouses and etc. These structured living arrangements could either be in the style or form of; condominiums, townhouses or free standing family homes in a community.
In this article we will address the following questions:
- What is a HOA, What are HOA fees?
- What do these fees cover?
Let us put this into perspective.
The primary attraction of living in a gated community or planned development is the amenities and convenience this structured living arrangement provides to property owners. But perks such as; well-maintained common areas, sidewalks, waste management/refuse disposal come with a monthly HOA fee payment.
What Is A HOA?
A HOA is an acronym for home owners association. They are a body of property owners that set rules and regulations that guide and govern home owners in a planned development or community. Some of the responsibilities discharged by the HOAs usually include but not limited to the following; maintenance, repairs and security. These set of rules or policies are called covenants, conditions and restrictions.
WHAT ARE HOA FEES?
HOA fees are recurrent monthly obligations/payments made by property owners to the association of home owners for the provision, management, and maintenance of shared amenities or communal assets in the development. Provisions of these services come with a substantial running cost; every home owner monthly levy is used to discharge some of these functions by the association.
Some service costs covered by the HOA fees are; maintenance of communal areas, pest control, insurance (for the communal assets and public areas only). City services such as waste removal and recycling, sewage maintenance, street sweeping and cleaning, water and electric. These are some of the standard services a HOA FEE will provide and cover sufficiently.
A portion of HOA fees are allocated to build up a reserve fund for the property owners, in the event a major repair or maintenance need arises unexpectedly. One third of your monthly fees go into this fund.
It is worthy to note that HOA fees are not fixed or uniform in any way; they vary in pricing according to location or peculiarities of the communities. HOA fees can range from as low as $100 – 300 dollars a month.
Not knowing what you’re getting into can prove costly. It is important to know the practices of an HOA, and how their fees are calculated before buying a property in any community. Ask questions, seat in for one of their meetings. Get insight before you commit!