If you're buying a condo, townhouse, or free-standing home in a neighborhood with shared common areas and amenities—such as swimming pools, tennis courts, parking garages, or even just the security gates and sidewalks in front of each residence, typically there is a homeowners association monitoring the groundskeeping, keeping everything in check and in an orderly fashion.
What Exactly Is a Homeowners Association?
Homeowners associaiton makes certian that the building, development, and/or residences compromised within, are in order, and everything is kept up to certian creiteria and condition.
Let's say for exmaple, the main roads of the association need paving because they've deteroriated over time due to weather, etc., the HOA would come together and based on the reserve amounts and/or if an assessment is needed in order to collect more funds in order to pave roads, the council will determine which will be best suited for the future imporvements.
What Are the Costs for HOA Fees?
To cover these property maintenance expenses, homeowners associations collect fees or dues (monthly or yearly, typicall monthly) from all community members. HOA fees can differ although they can be lower or much higher depending on the size of your house or condominium and the services provided. The larger the homeowner area, the higher the HOA fee—which makes sense, because the family of four homeowners in a three-bedroom condominium is probably going to be using the common facilities more than a single resident living in a studio condo.
Typically, a portion of the HOA fees whether each month or year, will be set aside to be put into a reserves account, in the event there is any maintnence or projects that need to be worked on. If the association doesn’t have enough fees in reserve to cover necessary expenses, it can issue a special “assessment,” or an extra fee, in addition to your monthly dues, so that the repairs can be made. An example of this is for example, changing out the flooring in the common areas of your building. If you have $10,000 in reserves, and the cost is $18,000 to replace all flooring in entire building, there is an $8,000 difference that needs to be made up, which will come from the home individual unit owners, sometimes upfront, sometimes on a payment plan.
Hoa Rules: What to Expect
All HOAs have boards made up of homeowners in the complex who are typically elected by all homeowners. These board members will set up regular meetings where owners can gather and discuss major decisions and issues with their community. For major expenditures, all members of the HOA usually vote, not just members of the board. Meeting minuters should typically be tracked, and usually at minimum, one meeting annually is held. Abiding by the HOA and building rules and regulations is crucial. Making sure all fees are paid in a timely manner, and attending all HOA meetings will only give you clarity towards your buildings/communities overall health.
Now that we have an understanding of how an HOA operates, it is always a good idea to consider running to be a part of your future HOA council, to help contribute to your community, as it will only help for your future resale!