HOA 101 – Understanding your Home Owners Association

Are you currently considering a home that requires you to become a member of their Homeowners Association? As a member of your neighborhood’s HOA, you are obligated to pay fees

to support management and maintenance. There are obvious pros and cons to living in a neighborhood with an HOA. Here is a short breakdown.

Pros to an HOA
- May maintain and pay for the upkeep of certain community amenities, including tennis courts, pools, neighborhood parks, golf courses and playgrounds.
- Helps to Preserve Property Values. Some HOAs may exercise some standards for how the outside of a home should look, including driveways, keeping garage doors closed, or limiting signs in yards. These standards are meant to keep the neighborhood looking good to keep everyone’s home prices up while luring more buyers to the community.
- May mediate disputes between residents. Should there be any animosity towards neighbors, the HOA can step in as an objective third-party and make a decision for both parties.

Cons to an HOA
- Will add extra cost to your monthly payments. HOA fees vary from community to community and it’s important to add the fee to your monthly mortgage payment so that you can fit it into your overall budget. HOAs are not tax deductible.
- Can sometimes feel like “Big Brother” is watching over you making sure your grass is mowed, landscaping is kept up and has appropriate flowers and

have to have a qualified breed of dog.
- May ask to screen and approve another occupant of your home if you decide to rent your home to outside individuals putting the renter’s move-in time on hold.
- Can raise the dues at any time for any number of reasons, such as assessments, lawsuits, cost of living, or simply because other homeowners aren’t paying. This isn’t common; however, it is a possibility to consider.
- Can evict you or foreclose on your home if you do not pay the dues on time and accumulate back fees and additional fines. These HOA liens are not extinguished in a foreclosure and short sale and will follow you wherever you go. So if you or someone you know is in a distressed situation, they need to stay current on their HOA dues in order to avoid litigation, penalties, and interest (or all of the above).

If you are considering buying a home with a HOA, ask to get a copy of the rules, regulations, and bylaws before you sign the purchase agreement, or make your offer contingent upon your receipt and acceptance of the rules. When managed well, an HOA can offer homeowners amenities that are well worth the dues – and is absolutely worth looking into if you’re in the market for a home.

What are your feelings on HOAs? Have you had positive or negative experiences with them? HOAs are more common in areas of Gilbert and Chandler than they are in Mesa, so sometimes they just come as a by-product of the area you are looking for a new home in. Call me if you have any real estate questions, I’d love to earn your business!