A properly run HOA begins with the developer setting forth the vision for the community from the start. This is where writing and recording of the restrictions and by-laws come into play. These documents give the property owners and the HOA members guidance of what is acceptable construction and behavior in the community. These documents run with the property to be purchased and provide them peace of mind and solidify the surrounding property values.
To maintain the features and benefits of the community there are times when dues become necessary. Things like streetlights, common areas for community use, front signage, insurance, and detention ponds are a few. Depending on the complexity of these items will determine the cost that is then shared by all the owners of the community. Having been a real estate agent for almost 30 years, I have heard plenty of horror stories of HOA boards running rampant with power. Then on the other hand you have a subdivision like I am fortunate enough to live in where the HOA is laid back and almost every homeowner follows the rules set forth by the restrictions.
Problems potential buyers should look for when considering a property located within an HOA are things like dues that go up yearly, in fighting within the board, how are violations handled when they arise? If you are the type of person who wants freedom from restrictions and wants full rein of their domain then a community with and HOA may not be for them. The trade off may be the Clampetts moving in next to them and potential for ruining property values.
In my experience the higher the price of the property, the more important and reviewed the neighborhood restrictions become. For instance, a golf course community that is gated with lots of rules and dues will be considered more closely by a prospective buyer verses one with only a few. It is also my opinion that when the property value increases so does the amount of information on the HOA and regulations that a buyer is given. Quite frequently there is little communication between a closing attorney office and an HOA, which leads to issues for the buyer after they closing.
Personally, my husband and I purchased 2 lots in a golf course community, and I spent hours looking for an HOA or any information about who was to be contacted to pay my dues. I can only imagine how difficult it would have been if I hadn’t been a real estate agent.
Overall, areas that have rules and regulations are a harmonious experience for those who live under their blanket, but one must be prepared and educated before jumping in.
If you would benefit from a conversation about HOA's, give us a call at Expert Real Estate Team. 864-895-9791
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