Wednesday, July 31, 2013

Home Buyer Tips - Home Owner Associations

An important part of the due diligence process home buyers should undertake before buying any home is an evaluation of the homeowner association (HOA).

To put it bluntly I believe homeowner associations exist to assure conformity within a neighborhood.  

There may be restrictions on types of vehicles, house colors, parking on the street (or even overnight on your drive way), investment property rentals, number of owner occupied properties and whatever.

Review the HOA rules.  Ask questions of the board and officers such as..
  • How often are the rules modified?  
  • What does it take to change the rules?   
  • How strictly are the rules enforced?  
  • How many times have the dues been increased? If so, for what reason?
  • Review the financial picture as well. 
Prospective buyers who have never lived under the auspices of a home owner association need to consider the boundaries and whether they can handle the restrictions.  As a buyer, you know your lifestyle.

Buyers should examine their attitude toward home owner associations.  Do you view an HOA as a self appointed neighborhood police force? 

Finally, associations are made up of people.  And people do not always get along.  And sometimes disputes arise.  Another question might be "how are disputes resolved?"