The Pros and Cons of Homeowners Associations

Many homeowners have been reluctant to select a home with a homeowners association (HOA) due to the negative connotation that it has received over the years. Living within the boundaries of an HOA often can mean more rules and lots of critiques from your neighbors. Choosing to belong to an HOA can also have great advantages that may outweigh its disadvantages.

Homeowners Associations, also referred to as property owners’ associations, were first established by land developers in the United States in the early to mid 20th century. It wasn’t until the 1960s, however, that the idea of an HOA was propelled forward and experienced a rapid period of national growth. Created as private associations formed by real estate developers, these entities were formed to make and enforce rules for the property and its contained residents. Those who purchase property within an HOA’s jurisdiction automatically become members and are required to pay mandatory dues, known as HOA fees. In return for payments received, an HOA will offer certain services and amenities to its residents – including, community swimming pool, garbage pick-up, lawn maintenance and snow plowing in the winter.

Identifying the disadvantages of an homeowners association can help to prepare the homeowner moving in to what is to be expected of them as being include as part of an HOA:

Fees – The amount paid to the HOA differ based on the amenities and services that the association provides to its residents. Depending on the community, these fees can tend to be extremely high – reaching amounts of upwards of $600 a month and can be a deterrent for homebuyers.

Consistent Maintenance  – Part of being included in an association means that the homeowner is required to maintain constant maintenance on all aspects of their home structure and surrounding lot. If this doesn’t sound appealing, it may not be the best choice.

Can Discourage Renting – Most associations have strict regulations against renting and some may absolutely not allow it. For example, your association may say that only 15 percent of the homes in the community can be rented, while the others must be occupied by the owners. Others will require that tenants go through a rigorous screening process and win board approval before they can rent. This can make it difficult to turn a profit on an investment property.

Possible Foreclosure – Some HOAs actually have the power to foreclose on a home if the fees are not being paid. Regulations vary from state to state, and though they’ll generally foreclose only in rare cases, it’s still something to think about.

Although being a part of a homeowners association comes with rules and regulations, many of these can be more of a benefit than an inconvenience to the homeowner. Here are the advantages of a homeowners association:

Nicer Neighborhoods – Because there are rules put in place to ensure homeowners keep up on the exterior appearance of their home, this in turn make the homes in the neighborhood to look more upscale. There will be no need to worry about any homes on the block being a disgrace to the community.

Higher Quality of Living –Every rule enforced in an HOA is made for the purpose of raising the quality of living. The neighborhood will be more peaceful, safe, and beautiful because of the rules, which in the end, increases quality of life.

Great Community Amenities – Many HOAs will use the fees that they collect monthly to help build and maintain the communal areas such as playgrounds, parks and swimming pools. Because the cost is included in the payment, this gives homeowners ease knowing these services come at no extra cost to the resident and that they will be consistently maintained.

Mediator for Neighborly Disputes – The HOA comes with strict rules for a reason. That way, if ever a dispute arises between neighbors, the HOA can intervene and address the problem at hand. These issues can include anything from excessive dog barking to loud parties and property line disputes.