What to Know about Living in a Neighborhood with an HOA

Living in a community that is governed by an HOA can provide lots of perks, like exclusive amenities, maintenance of shared spaces, lawn care, and more. There are also some potential drawbacks, and not all HOAs are created equal.

Here's what you need to know about living in a neighborhood with an HOA.

What is an HOA?

HOA is an acronym for Homeowner's Association. It is a non-profit organization responsible for maintaining the community, and can oversee a variety of features in the neighborhood. The association is funded by dues from homeowners, usually collected on a monthly, quarterly, or annual basis. The cost of the HOA dues will vary widely depending on the services provided and the number of residents in the community.

Pros of an HOA

There are many benefits that come with living in a community that is managed by an HOA. Some of the benefits include:

• You can count on your neighbors keeping up with the condition of their homes, a safeguard for your property value
• Community amenities and green space is available to you without any personal responsibility for maintenance or repair
• Some HOAs host social gatherings, community yard sales, and other special events throughout the year
• Neighborhoods with an HOA tend to stay in better condition than those without

Cons of an HOA

There are also some potential drawbacks to living in an HOA-managed neighborhood, including:

• The added monthly expense may affect your mortgage approval status, as your lender will count it in the total PITI(A) (principal, interest, taxes, insurance, and association dues) you are responsible to pay each month
• Your choices for exterior design, renovations, holiday decor, and political signage may be limited by HOA regulations
• Depending on the guidelines of your HOA, you may be subject to rising rates that are out of your control

Questions to Ask Before Buying in an HOA-Managed Community

Each HOA is different, so it is essential to ask the right questions before you become a part of the community. Not sure what questions to ask? Start with these:

• Are HOA fees required at closing for the year?
• What are the rules regarding community amenities?
• What guidelines do homeowners need to follow regarding exterior design, remodeling, holiday decor, and political signs?
• Are homeowners in the community allowed to list their homes as rentals? Are short term vacation rentals allowed?
• How frequently can HOA dues be raised, and do homeowners get to vote on this before hand?
• What is the process for becoming part of the HOA governing board?
• Can I see minutes or records from recent HOA meetings?
• How much money is in the HOA reserve to handle major repairs or renovations?
• What are the penalties associated with breaking rules? Are homeowners given a single notice, or multiple, before being ticketed?
• If possible, ask a few current residents how their experience has been with the HOA.

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