HOAs or Homeowner Associations exist to enhance communities. They will maintain common assets, establish rules and ensure varying degrees of conformity within neighborhoods. The latter is meant to protect owners’ collective interests. If you are lucky enough to support the shared objectives life in an HOA community is good. There are certainly pluses and minuses!
The good and bad
Many HOA residents find that not having to do all of the maintenance suits their lifestyle. Others enjoy the shared assets, like gyms or pools. If you want a pool but not the cost, living in a condo or planned community is great. However, while millions of people enjoy living in HOAs, others do not. You may be irritated by the fees, find the rules restrictive, or believe the community is poorly managed. In that case, HOA life is no paradise. Learn more about the pros and cons here.
Opinions aside, the presence of an HOA – especially a well-run one – should protect property values. If you want to understand why, take a walk or drive through a gated HOA community during an open house and see how it feels. While there are exceptions, HOAs are usually clean and aesthetically consistent. That is typically because the CC&Rs ensure everyone in the neighborhood stays on top of on yard work and maintains uniformity.
Maintaining the community
Maintenance and replacement of common elements (those assets owned by the community) are funded by the owners in proportion to their unit entitlement. Reserve funds are established to save for maintenance, repairs, and eventual replacement of common assets, with special assessments charged when an unexpected expense arises. Each state has its own rules around reserve funds and HOAs have varying flexibility on how fully funded they are. To track the health of common property, reserve studies are updated regularly.
Some HOAs keep dues and regular assessments low in favor of paying for larger projects when necessary. Others build up reserves regularly and rarely charge special assessments. Whatever the approach, Homeowner Associations exist to enhance communities.
Want to learn more about your HOA? Run a free Eli Report!