The Pros & Cons of Homeowners Associations: HOAs

If you're shopping for a home there’s a good chance that some of the homes you’ll look at, especially brand new homes, will be part of a homeowners association; an HOA. There are literally tens of millions of homes in the US that are part of an HOA, with more coming with each passing day.  I've created a short list of the most commonly recognized Pros and Cons of living under supervision of a Homeowners Association.

PROs

• HOAs provide access to community amenities like parks, pools, tennis courts, clubhouses, fitness centers, and the list goes on.  Want a nice pool to lounge around during the summer months?  How many months of HOA payments would it take (at $48-$95 per month) to pay off a $45,000 pool…plus the service and maintenance of that pool?
• HOAs assume many responsibilities that would otherwise be yours…or perhaps nobody’s.  Most of these responsibilities are referred to as ‘common area maintenance,’ such as landscape maintenance, paint, park upkeep, pool servicing, etc.
• HOAs keep up the appearance of your community. By enforcing bylaws, your HOA encourage the original integrity of the development by requiring acceptable appearance of buildings, gardens, and common areas.
• Neighborhoods and developments supported by effective HOAs often command higher sales prices as the development as a whole tends to be more sought after.
• Often time, HOA fees include other services such as water, sewer, and/or garbage.
• HOAs can often mediate between neighbors rather than giving in to calling the police or resorting to lawsuits.

CONs

• HOAs can be mismanaged; resulting in loss of reserves needed for operations, and can result in an increase of HOA dues. 
• HOAs can be perceived as a bit too “Big Brother,” asking you to remove lawn decorations or to repaint the front door that you just painted red back to its original color.
• HOAs can limit or prevent the lease or rental of any or all of your property.
• HOAs can actually foreclose on your home if dues aren’t paid.  Although this is a last resort and is very infrequent, it does occur and remains a possibility.
• Although there are benefits to being a member of an HOA, buyers may be turned off by the idea of following the bylaws and/or paying the non-tax-deductible Homeowners Association Dues.

Like with so many Real Estate related questions, there is no one ‘best’ answer.  “To HOA…or Not to HOA” is another of those questions.  What''s my advice? Stick with the idea of buying with a particular lifestyle in mind and you’ll do just fine. 

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Andy Blasquez  

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