Homeowners Associations…either you love them or hate them. Often times, I am asked about Homeowners Associations and what are the good, bad and ugly about them. You see, I’ve lived in them and still do. I often tell buyers it really comes down to the homeowners and your involvement. If you don’t like what’s going on with the neighborhood, your job is to attend the meetings and get involved. It’s a body of people that have to negotiate and work together for the greater good of the entire community.
Sure, we’ve had the awful association of owners that are sticklers. I’ve also seen very relaxed associations where the thought is “rules, what rules?”. I’ve been part of some that are managed by companies that specialize in homeowners association (usually for an annual management fee) and I’ve been in part of ones that self manage. They all have their pros and cons.
When you are looking at buying or selling into a community, here are some tid bits to consider:
CCR’s-nearly all with have Covenants, Conditions and Restrictions. This tells a homeowner what they can and cannot do. What the rules of the association/neighborhood are and how it is governed. You will want to review these, especially if you have something special you are planning to do, such as erecting a detached building or changing the paint color of the home.
Dues – you will owe money annually (in most cases) to the association. These funds generally cover community parks, open spaces (also known as tracts), streets, lighting, fencing around the community (not your property fence) and other “community items”. Also, the dues are collected for reserves to handle any future improvements or corrections on the community items. You will want to read the CCR’s and ByLaws to see what the fee schedule is.
When you buy the property or sell it, there may be transfer fees due by one or both seller and buyer. To confirm how much that is, you will want to reach out to the association board member or the management company. This fee is usually $50-$100.00 from what I see, but could run a bit more.
Rule of thumb, do your homework. Get the documents and the info so you are making a informed purchase. If you have any questions about this subject or other real estate questions in general, please contact me. I’m here to help!