Originally posted on my Denver Real Estate Blog at : The Real Estate Transaction Series: HOA Matters
HOA’s, or Homeowners Associations, can be very good to have in place in a community. The HOA’s can serve to enforce covenants, guidelines and be a positive addition to a community. Not everyone likes them and there are plenty of communities that don’t have them. So the choice is yours. But, if you choose to own in an HOA governed neighborhood, then just remember that you agree to abide by the terms of the HOA and agree to adhere to the authority of the HOA.
Some HOA’s are very organized and active in the areas they serve. Some are not. And some, you may not even know exist! This is one area that can affect a potential buyer without them even knowing it. These situations can be very problematic for a homeowner that isn’t aware of an HOA, or the rules of the HOA. Sometimes there can be an existing HOA that formed long ago and has since faded away and became less relevant to the neighborhood. Basically, nobody continued to be active and enforce the HOA rules, etc…now forgotten by most, maybe even the sellers of the home you are looking to buy or bought. But this doesn’t mean the HOA was dissolved and may still exist! That means that you likely need to abide by those requirements. What if they say that you can’t grow a garden for example, and that’s exactly what you love to do. So you grow your garden then suddenly someone discovers the HOA rules and gardens are not allowed. Then the rules are enforced on you and your garden! Will it matter that you were unaware of an HOA and therefore the rules? I can’t say. But you can see the problems it can cause. Of course, an unknown HOA almost never exists but it can happen and sometimes it does.
So it is very important to find out if there is an HOA, get the details required for public disclosure per the Colorado Real Estate contract, such as the financials, insurance, meeting minutes and actually look though them. Take the time to contact the HOA and find out if there is any planned or likely increase in dues. Right now, there are plenty of distressed homes in many of these HOA guided communities. So, many of them may be increasing the fees, charging special assesments, etc…to save from going broke from lack of payment from these distressed homes. It’s just real important to check it out within your rights via the real estate contract.
Remember, if you know there is an HOA, get the required information and understand it. If you don’t know if there is an HOA, do your best research to find out one way or another. HOA’s are a positive thing and benefit the home owners. Just know that when they exist, you are not only buying a home, you’re also buying into an HOA controlled community and the rules that go along with them.
Note: This article is intended to provide general information and is not intended to provide specific advice.
Questions?
If you have specific questions about your specific real estate transaction, contact your real estate agent. If you don’t have one and have further questions, I would love to help with all your Denver real estate needs.
HOA Matters is the 2nd Post in my Real Estate Transaction Series. You can also read the first post here on my Denver Real Estate Blog: The Real Estate Transaction Series: Deadlines and Dates
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