Regardless of how active you are in the real-estate world, odds are you have heard about the homeowners association at some point. How does the homeowners association work? For what reason do they exist? We answer these questions you might have in the guide below.
What is an HOA?
Homeowners Association (HOA) is a group of property holders or homeowners inside a specific subdivision or apartment. HOAs normally comprises of a board of directors that have been elected by local property holders to keep up the set rules and regulations.
At the end of the day, HOAs are just chosen people entrusted with keeping up an area’s state of affairs. Most HOAs center around saving and improving the homes inside its jurisdiction.
Why does HOAs exist?
Homeowners association is normally formed by the real estate developer who is in charge of the community. The HOA exists so that they can monitor the neighbourhood and guarantee it keeps on thriving.
Furthermore, the developers will keep the HOA up to date with their most recent projects as a method of advertising, managing and selling homes. HOAs are a path for developers to keep up their presence in the community once everything is built and handed off.
How does the Homeowners Associations work?
HOA is usually set up by the developer of the buildings and is handed off to the homeowners after selling a certain number of lots. People who buy a home that is governed by their respective HOA will be required to obey the rules set by the HOA.
Moreover, the homeowners have to pay monthly and annual fees which will be used to enhance the community they live in. Even though there are fees to stress about, they normally improve living conditions and in some cases may even increase the value of the homes nearby.
What are the HOA dues?
To maintain and upkeep the neighbourhood, HOAs will require the homes situated inside their area to pay what are known as dues. Also called fees, HOA dues are usually collected on a monthly or yearly basis. These dues can be higher or lower depending on the size of the home and services provided by the HOA.
For instance, neighbourhoods that offer shared amenities, such as a local pool would normally have higher dues.
Do renters pay the HOA?
Yes, in spite of not owning the property, tenants who move into an area with an HOA will be required to adhere to the guidelines set by the association and at times include paying the dues. In some cases landlords could be subjected to the HOA dues, however, this would be determined in the lease agreement beforehand.
Additionally, landlords are responsible for giving leaseholders a copy of the CC&Rs upon move in, so they know about the local neighbourhood rules. If the leaseholders have any questions in regards to the HOA they will need to communicate with their respective landlords.
We hope that this guide answered some of the questions you had about the HOA.