What is an HOA? Is having a HOA good or bad? What does an HOA do? What should I pay attention to when buying a property in a HOA?
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HOA Definition – HOA stands for Homeowners Association, which is an organization within a community that makes and enforces the rules and regulations of that community.
What do hoa fees cover – This is going to vary within each community but typically the homeowners association is responsible for at least the common area. In some communities, the hoa fees covers the exterior of each units, roofs, limited insurance, water, sewer, trash, etc…..
Each community homeowners association is different and that’s why it’s important to make sure you know what the hoa covers prior to closing on a home.
What you should pay attention to when buying a house with a hoa
1. Make sure you are not only looking at the monthly hoa fee but also the history of that fee. Where has it been the last 10 years? Has it gone up every year or is it pretty stable? This will give you an idea of what to expect with the future of the hoa fee.
2. Review the financials carefully. Is the homeowners association well funded? Is there money in reserves? HOAs that are well funded and have money in reserves typically don’t have to assess homeowners when it’s time to fund projects in the community whereas HOA’s that aren’t well funded end up having to assess homeowners to pay for those projects.
3. What does the HOA fee cover? Does it include the roof and the exterior or are you as the homeowner responsible for that? Does it cover insurance (HO6) for the property or are you required to have additional insurance to cover the walls in?
4. Make sure you are reviewing items in the Rules and Regulations like pet policies, etc…things that may affect you as a homeowner in the community.
HOA’s can be very complex and this is only a small part of them but make sure you are doing your due diligence prior to buying a house/condo in an HOA so you don’t have any surprises down the road.
If you have additional questions about an HOA or homeowners association, please comment below or contact me directly. Thanks for watching.
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