In theory, HOA’s create a utopian community; neighbors united together in a picturesque neighborhood of beautiful homes and freshly groomed lawns. An HOA is a legal entity, which puts in place a Declaration of Covenants, Conditions and Restrictions (CC&Rs). CC&R’s basically state what homeowners within the community can, must or cannot do, related to the property they have purchased and the community amenities to which they have access. As in everything in life, there are some advantages and disadvantages. The same goes for HOA’s. We’ve listed below some of the good, the bad, and the ugly of HOA’s.
The Good | Homeowner’s associations can be your best friends when it prevents your neighbor form painting her house pink or their RV being parked in the street. The HOA keeps a close eye on how well homes are maintained, and as a result, homes located in a neighborhood that is well maintained typically retain their value better than those outside an HOA environment. HOA’s also give accessibility to recreational facilities and activities, such as a pool, recreation center and often a golf course. They also provide maintenance of common areas and trash collection, allowing for shared expenses. HOA’s can provide a sense of community with neighbors and other residents, as well as provide a safe, family-friendly neighborhood.
The Bad | The number one complaint of HOA’s is its rules and regulations that can be lengthy and in some cases, highly restrictive. It is difficult for some to realize that even though they own the property they may not have the final say in what can be done to it. Many times HOA’s prohibit or limit the use of such things as flags, placing signs in your window, holding garage sales, how many cars you can have and where you may park them… and the list goes on.
The Ugly | While HOA rules can be a hindrance and annoying at times, if broken, the penalties can be expensive and often severe. If a homeowner falls behind in dues, additional fines are added and in some cases, these fines may lead to liens or even foreclosure. Cost is another big disadvantage of HOA’s. In addition to mortgage, real estate taxes, and insurance, there are often extra expenses to consider when purchasing a home within an HOA community.