Home Owners Associations 101
Almost all planned communities have a Home Owners Association.
Home Owners Associations
A Home Owners Association (HOA) could be either condo associations or active adult communities. Be sure that you know what is involved with belonging to an HOA before signing the contract to purchase a home. You have the right to know how much the HOA fees will be. In addition, you need to know what those fees pay for. And that’s because this can be a significant part of your housing expenses.
How much are the HOA fees?
In Monmouth and Ocean counties, we’ve seen a wide range of fees. In some communities the HOA fees are as low as $9. per month. Conversely, we’ve seen monthly HOA fees of more $1500.00 !
The services you receive vary. Most Home Owners Associations include lawn maintenance (grass cutting) and snow removal, but not all of them do. Usually, accumulations of 3″ or more of snow may be required before they remove it, But the exact amount of snowfall varies. Many times garbage and recycling services are included, but in others this may be the home owners expense. Other communities may offer a club house with pool, tennis courts, a gym, even golf. We find that when there are nicer common facilities, the higher the monthly fees. In addition, if it’s a gated community, it’ll cost you. That’s because it costs the association (actually the home owners) around $250,000 per year to have a guard on duty 24 / 7.
With standalone detached homes, the home owner is responsible for the exterior maintenance. Therefore, the HOA fees are usually less. However, when there are multiple homes in the building(s), the HOA is responsible for exterior maintenance. As a result, the HOA fees are usually higher.
Type of Ownership
However, another factor is the style of the homes. If the ownership style is fee simple, which is usually a detached home, you, the homeowner, are responsible for all maintenance of your home – both inside and out. If you need a new roof, you’ll need to pay for it. However, if it’s condo ownership, the association owns the exterior of the building. Therefore, the HOA pays for that new roof. We find that with most HOAs, windows and doors are considered “interior”.
Yet another type of ownership is a co-op,which is similar to condo ownership. However, instead of owning the property, you’ll own shares in the corporation that owns the entire complex.
More About the HOA
Most HOAs also have rules and regulations. These rules can dictate not only whether or not pets are allowed, but also what type, size and number of pets are allowed. Some HOAs can tell you when and what color to paint your front door. In additional, you can be prohibited from parking a boat or an RV in your driveway. The HOA can enforce these rules and issue fines to violators. And, if the HOAs need to pay for major repairs that are not in the budget, they can levy special assessments, A common example for this would be if snow removal expenses exceed the budgeted amount.
When purchasing a home where there’s an HOA, get a copy of the financials. Check to see if they are financially viable. If you need help to decipher the financials, your real estate attorney should be able to help. Read the rules and regulations and be sure that you understand them before you purchase.
When you’re ready to either buy or sell a home contact us
Would you rather look at homes in active adult communities?
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