If you’re allowed to rent out your property, the HOA might impose restrictions. You might be restricted on the allowable size and number of pets, if you can have them. Street parking and the number and types of vehicles parked around a house could be specified. If the HOA doesn’t take care of your lawn, you might have restrictions addressing trees and bushes as well. The HOA might require you to keep the exterior consistent with the entire neighborhood, specifying the type of roof, shingles and paint colors you use and what type of fence or pool you can get-if you’re allowed one at all. In addition to checking on the HOA’s financial details, make sure you’re comfortable with all the CC&Rs you’ll have to comply with if you buy the house.

Whether the HOA has made any special assessments on homeowners in addition to HOA fees.

How frequently it has raised rates in recent years.

Whether the HOA is facing legal trouble.

How much it has in reserve, which can help you determine whether the HOA can pay for major, planned repairs as well as unplanned ones without hitting everyone with a special assessment or higher ongoing fees.

Like taxes, they can go up each year or every few years, depending on the needs of the association.Īfter you reach a purchase agreement with the seller and before you finalize the deal, you’ll want to review documents-including financial disclosures and board meeting minutes-to learn details about the HOA’s finances, such as:

Some HOAs might even cover cable TV and utilities.īut HOA fees are not static. A higher-end development that provides exclusive services such as a valet and a fitness center would charge much more. The average cost is more than $300 per month, although fees in some states are much higher, such as New York, which averaged about $570 per month, according to a study by Trulia, a real estate website.įor example, a small townhome development might require just $200 to $300 per month in fees to keep up with lawn and exterior maintenance. HOA fees can vary quite a bit-from a couple hundred dollars a month to a few thousand- depending on the type of development in which you live. The HOA’s insurance policy will need to cover the areas that wouldn’t fall under individual homeowners’ insurance, such as common areas. If the neighborhood has a pool, a clubhouse or on-premises security, you’re likely to pay for them through your HOA fees.

Since major projects can cost a lot of money, an HOA might put aside a percentage of fees over the course of several years to pay for community-wide roof and gutter replacement, for example. The maintenance of the home exterior, such as siding, roof and gutters, could be covered by an HOA, especially in a townhome community where there are shared walls. HOAs will hire someone to plow the driveways, parking lots and possibly the streets in the area after a snowfall. An HOA is usually in charge of maintenance of common areas, such as lawns in front of and in between townhomes and other common areas throughout the subdivision, including parks and along walking paths. If you plan to buy a home in an HOA, you’ll pay fees-often monthly-directly to the association to help cover a variety of maintenance costs and neighborhood amenities. The researchers found that HOAs can have a positive effect on home prices, as homes in an HOA were valued, on average, 4% higher than similar ones that did not belong to an HOA. Almost 60% of recently built single-family homes and 80% of homes in new subdivisions are in HOAs, according to a study by researchers Wyatt Clarke, who works at IBM, and Matthew Freedman, an economics professor at the University of California-Irvine. HOAs have become more common in recent years: More than 1 in 4 homeowners live in a community association, according to the Foundation for Community Association Research, a nonprofit that provides analysis on HOA trends.

The board can enforce rules-known as covenants, conditions and restrictions (CC&R)-that could result in fines and legal action for residents if they are not followed. HOAs are usually governed by volunteer resident-led boards that also might include a representative from a development or management company. HOAs also provide upkeep of common spaces and sometimes the property surrounding individual homes. An HOA is a resident-run private organization that governs a neighborhood, primarily to set up and enforce rules that are aimed at keeping the neighborhood’s appearance consistent.

Hoa meaning