Pros and Cons of HOA
Pros and Cons of HOA
Are you searching for a home and are wondering if living in an HOA community is a good fit for you? Keep reading to learn more about the pros and cons of HOAs.
HOA, also known as a homeowners' association, is an organization that sets and enforces rules and standards for a neighborhood or a condo. HOA offers many benefits, such as amenities, maintenance, security, and many other things. But on the other hand, it does have its disadvantages, such as fees, restrictions, and bureaucracy.
Living in a community that is run by a homeowners' association is very common. HOA is usually a board of directors that is made up of volunteers who devote time to overseeing the community. There are over 370,000 homeowner associations in the US. This is over 40 million households, over 53%.
Everyone has their own opinions on HOA, so if you are wondering if living in an HOA community is for you, keep reading to learn more about the pros and cons of the homeowners association.
Here are the pros and cons of the homeowners association (HOA).
1. Pros of HOA
1. Provide Amenities
Many HOA communities offer residents access to the owner and resident-only amenities, which are considered perks that have been maintained by the HOA. Some of these amenities could include pools, clubhouses, gyms, sports facilities, and picnic areas.
These amenities are considered semi-private in that community members have access, but they do not have to worry about their upkeep. These amenities help put a sense of community throughout the neighborhood while they offer social gatherings throughout the years.
The plus side to these amenities that HOAs provide is that some of these things are things that some people may not be able to afford on their own, so this makes it more accessible and affordable in such a close proximity to the comfort of your own home.
2. Reduce Responsibilities
The HOA is in charge of overseeing the community, so they handle the landscaping duties as well as maintenance for common areas and amenities. This helps improve curb appeal and increase home values throughout the neighborhood, which can help the selling process.
Having members in charge of the community helps in many ways. Some HOAs also include trash collection, pest control, and many other things that can save you time and money and enhance your quality of life overall.
The fees that you pay sometimes seem like a lot, but if you think about it, these fees go towards many services like maintenance, trash removal, snow removal, and other things that you will not have to do on your own. So yes, you are paying, but for something in return that helps your life out.
3. Keep Up Appearances
Most HOAs handle a large part of a home's exterior upkeep, so you do not have to. Many of these include these things below. Keep in mind that each HOA is different, so know what your community offers.
- Landscaping
- Pest control
- Trash pickup
- Cleaning/painting exterior
- Snow removal
- Maintaining common areas
- Repairing roads, walls, buildings
HOAs typically have many rules and restrictions for the appearance of homes and the community. The rules are to prevent property neglect and maintain the property values for the houses and the community overall. HOA neighborhoods typically look more maintained and newer, even if they are older communities compared to ones without HOAs.
4. Higher Resale Values
HOAs sell, on average, 4% more than other homes that do not offer HOAs. The selling price of homes is higher for larger houses and homes in small neighborhoods. Since the HOA keeps up with the community and upkeep, homes tend to stay in better condition than others.
Another reason for this is a sense of community when there is an HOA. Many people search for an area with friendly neighbors, and a welcoming community, so many people want homes with an HOA. Hence, the demand for these is higher, so prices tend to be more expensive.
Buying a house is a considerable investment, and everyone wants their investment to increase in value over time, not decrease. Purchasing a home that is part of a homeowners association can be a great choice if you are looking to improve your property values and be a good use of your hard-earned moeny.
5. Offering Emergency Services
Many people don't really think about this part of the HOA, but it is sometimes hard to deal with emergencies on your own. Suppose there is any natural disaster or, flooding, or even a fire that can damage your property. In that case, it can have a significant impact on your property, mainly if it isn't addressed immediately.
Many HOAs provide emergency services, which can be a quick assistance that will limit damages and prevent anything worse from happening to the property, which can also keep your home values up all in one. There are many benefits for these services, and the fees you pay do go into this sector as well so it makes it all worth it.
2. Cons of HOA
1. Fees
While HOAs have many pros, the one primary reason people do not like them is the fees, mainly because they are mandatory. The HOA fee is the amount of money collected by an HOA organization from the owners to maintain the community. You are required to pay dues when you buy a home in a homeowner's association.
The fee will be disclosed before you become a member. In addition to the monthly/annual price you pay, the HOA may charge a one-time home stranger fee when you buy the property.
These fees, however, do go to the community to help of maintaining it as well as all the amenities and services that they offer the residents. Every HOA has different fee amounts; they can range from $100 to $1,000, so just be aware that every neighborhood varies.
2. Covenants and Rule Restrictions
Each HOA will have its own covenants and rule restrictions in place, such as what paint you have, how you decorate, where to park if you can rent or not, and many other things. These rules tend to be in place to help regulate the community and boost the curb appeal of the homes.
Many people do not like to be told how they decorate or what to do with their own homes, so this is one of the main reasons why people do not want to live in HOA communities. Below are some common violations that many HOAs follow.
- Exterior home paint color
- Garbage in view of the public
- Unkempt conditions like peeled paint or mildew
- Unapproved shutters
- Hose, toys, and miscellaneous objects left in the driveway
On the other hand, an HOA can stop you from renting out your own home, which many people do not like. HOAs can impose many rental restrictions and disallow certain pets. Every HOA is different, though, so make sure you know the community master plan.
3. Possibility of Poor Management
HOAs are made up of volunteers in the community, which means that these people are humans and not so much professionals. A bad one can mismanage the community, misspend money, or even worse, abuse their power, which is one of the main reasons HOAs tend to face lawsuits because of the failure to maintain the community.
If the HOA is lacking in money or anything, the whole community is on the same line. They are all one, so the residents also hold that responsibility if your management messes up. On the other hand, sometimes there are lousy board members in whcih they will be very stingy about little things, which is one of the main cons people think of when it comes to HOAs.
4. Risk of Lien or Foreclosure
You are required to pay the HOA fees when you move into this community, even if you do not use any of the amenities. If you do not pay your fees, then you will be fined. Those who do/can not pay the acceptable assessments or the average HOA fees can face a lien on their property from the HOA and risk of losing thier home to foreclosure and ignoring their mortgage.
However, even though this may be a thing that can happen, it usually is the last resort for the HOA, but in general, if you do not pay your fees/fines, you will be punished, and the risk is always there. Sometimes, these fees can be hefty and seem obnoxious, so if you are paying these fees for amenities and things you do not think you will need, maybe search for neighborhoods without HOAs.
However, keep in mind that this is considered the worst-case scenario. Each state may vary, as well as each community. In North Carolina, an HOA is permitted to include charges for the following in its lien unless provided otherwise:
- Past due assessments
- Late charges (not to exceed greater than $20 a month)
- Fines for violations
- Interest on past-due common assessments
- Other charges connected to any of the documents or unpaid assessments
Overall Pros and Cons of HOA
Pros:
- Provides many accessible amenities
- Reduces responsibilities for homeowners
- Keeps up the appearance of the neighborhood and all homes
- Creates higher resale values and property value
- Offers emergency service assistance
Cons:
- Fees and fines, either monthly or annually
- Many covenants, rules, and restrictions throughout the HOA
- High possibility of poor management throughout the community
- Risk of lien and foreclosure and many fines
FAQS
What are some advantages and disadvantages of an HOA?
HOA communities offer many benefits, such as the amenities, security, maintenance, and many other things. Still, on the other hand, there are some cons as well, such as fees, conflicts, bureaucracy, and restrictions.
What is the point of living in a HOA?
One of the main reasons people prefer to live in homes in an HOA is because it stabilizes home values, keeps common areas maintained, and there are strict home appearance rules that keep the neighborhood well-kept.
Why do people tolerate HOAs?
One of the reasons people tolerate HOA is due to the consistency of the property values because they ensure your investment maintains the value through laws, rules, and maintenance.
Why do people join HOAs?
Many people prefer to join the board members of the HOA because they have better control over the community rules and maintenance instead of having someone else do it.
Pros and Cons of HOA - The Bottom Line
Living in an HOA community has many pros and cons, but the decision is up to you if it is right for you. Some HOAs can be better or worse than others, but it varies for each association.
If a community you are interested in has an HOA, make sure you understand its status, plans, and board members to see if it is a right fit for you or not. About 63% of HOA community residents responded positively to their HOA, so understand the pros and cons to see if you are one of those.
HOAs can make your life as a homeowner less stressful and provide many amenities that you may not be able to do on your own. However, everyone has their own lifestyle, so making sure you know what an HOA is and what specific ones do is essential when choosing a neighborhood to live in.
If you want to move or need help selling, contact us or visit our website. Our team at Raleigh Realty is here to help you with any home buying or selling needs.
Ryan Fitzgerald
Hi there! Nice to 'meet' you and thanks for visiting our Raleigh Real Estate Blog! My name is Ryan Fitzgerald, and I'm a REALTOR® in Raleigh-Durham, NC, the owner of Raleigh Realty. I work alongside some of the best Realtors in Raleigh. You can find more of my real estate content on Forbes, Wall Street Journal, U.S. News and more. Realtor Magazine named me a top 30 under 30 Realtor in the country (it was a long time ago haha). Any way, that's enough about me. I'd love to learn more about you if you'd like to connect with me on Facebook and Instagram or connect with our team at Raleigh Realty. Looking forward to connecting!
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