Q: What is a homeowner’s association (HOA), and how does it work?
If you are thinking about buying a condo, townhome, or home in a subdivision, you need to know how an HOA works. Officially, HOAs are governing bodies that enforce regulations designed to preserve and maintain shared spaces or structures in a community. HOAs are governed by a set of bylaws that spell out what the HOA is responsible for and what each unit is responsible for. Unofficially…an HOA can feel a little bit like high school politics, but with real money — YOUR money.
HOAs are typically responsible for green space, gyms, rooftop decks, garages, lobbies, and hallways. Beyond communal amenities, the condo association is also responsible for shared structural components such as the building’s façade roof, windows, plumbing, electricity and more. As a condo owner, you are responsible for paying a percentage of the total upkeep cost, which is where things can get a little complicated.
There are two ways that, as a homeowner, you will contribute to your HOA:
? Regular dues: Most HOAs require all owners to pay a monthly maintenance fee (typically referred to as dues or assessments). HOA fees can range anywhere from $100-1000 or more, depending on the property.
? Special assessments: In the event of an emergency, your HOA may require a special assessment, where the total bill for service is divided between all property owners. Special assessments are not always a given, so before you buy a home in an HOA, it is essential to review its books and budget to ensure enough cash reserves to pay for an emergency like a roof replacement or burst pipes.
If you are considering buying a home with an HOA, I will always help you review the HOA bylaws, recent meeting minutes, budget, and any other necessary documents to ensure there are no red flags. If you have any questions about HOAs, I’m a call, text or phone call away!
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