HOA – OC Neighborhoods

Pros and Cons of Moving into an HOA Neighborhood

Are you thinking about buying a home in an HOA neighborhood? A homeowners association is a group of people who oversee an area of homes by creating and enforcing rules. They are also in charge of maintaining the grounds and are found with most apartment buildings or planned communities. But when considering an HOA neighborhood, you should first weigh the pros and cons. To help you decide if these types of communities are for you, check out our list of pros and cons of HOA living.

Pros of an HOA Neighborhood

There are many benefits homeowners enjoy from HOA neighborhoods. Here are some of them:

Charming Neighborhoods

HOA communities tend to be very charming because all common areas, such as playgrounds and pools, are maintained by the HOA. This is one of the most significant benefits, as it allows you to use great amenities without any upkeep on your part. Also, HOAs have strict rules on what you can and cannot change about your house, so there’s no worry about a neighbor’s home becoming an eyesore.

Conflict Mediation and Remedy

If you have problems with neighbors, such as loud music being played late at night or a barking dog who won’t stop, the HOA will step in on your behalf and act as a go-between.

This is especially helpful if you’re already attempted to remedy the problem on your own, and it didn’t work.

Can Enhance Your Social Life

Another reason many people prefer HOA communities is because they foster more of a sense of community among the residents. Not only will you have the chance to meet neighbors at HOA meetings, but many of these organizations host social events occasionally. For example, some HOAs host block parties, Bingo nights, etc. But, sharing amenities such as the tennis courts, golf course, or the pool also provides an excellent opportunity to meet other residents.

Cons of an HOA Neighborhood

Most good things in life also have drawbacks, so here are some cons of living under an HOA:

Fees and Other Costs

One of the biggest drawbacks for many is the HOA fees. These fees are paid monthly and are separate from your mortgage. In general, the more amenities a neighborhood offers, the higher the HOA fees.

And you also have to consider that they may make you pay other special assessments, such as costs to maintain or repair roads or even roofs on shared buildings. So, essentially, you’re paying for amenities each month, whether you use them or not.

Increased Regulations

As we mentioned, HOAs usually have many rules, which can be a good thing – but not always. In most HOA neighborhoods, you have less freedom to landscape how you want, are restricted from watering on certain days, and may not even be able to park a vehicle on the street. Other areas that may be regulated include fences, exterior paint colors, hedges, garages, home businesses, swing sets, solar energy installations, sheds, and more.

Foreclosure Risk

If you default on your HOA fees in certain states, your house may be foreclosed upon. For instance, California allows HOAs to foreclose on properties after 12 months or when the amount due is more than $1,800. In other states, there are no limitations to when an HOA can begin foreclosure proceedings on your property. If you are worried about your ability to pay these dues each month, it’s probably best to protect your future and avoid an HOA community.

Ultimately, living in an HOA neighborhood is excellent for some and dreadful for others. So, be sure to carefully weigh the pros and cons of living within this type of neighborhood before you make a purchase.

All Things About HOA’s You Want to Know

HOA is an acronym for “Home Owner’s Association.” Homeowners typically pay their monthly/annual dues to this association in the community they reside.

Why is there an HOA?
HOAs are normally created when a developer builds residential property in a particular subdivision or multiple parcels of land. This type of “property” can appear in a number of ways; commonly in a condo building; a town-home complex; and also in a planned neighborhood of single family homes.

The Home Owner’s Association establishes a set of bylaws, which are a wide-ranging set of conditions for residents in the community. It provides the community with structure, detailing rules and regulations for maintaining common areas the residents share such as the pool, roads, parking, pets, decoration and so on.

What does an HOA Provide?
The HOA performs duties in the best interest of the community as a whole. HOA’s have “Covenants, Conditions, and Restrictions, or CC&R’s for short.” It’s a group of rules enforced by the HOA that manage the community.

They can determine various things you are allowed to do such as your home’s exterior paint color to additional expenses for roof replacement or renovations. They can even establish how many pets you are permitted to have with you and the size of vehicles.

HOA Budget: Your HOA dues help fund the HOA budget for maintenance of common areas in the community such as landscaping, hall lighting, security, pools, and any other amenities.

HOA Board: An elected board controls the HOA. The board is made up of external members and residents of the community to interview and contract new vendors to take care of the community. The board can take residents in the community to court or evict them if rules are not followed.

About Homeowner Dues
Dues determine if the HOA will be successful or not. The dues usually paid monthly, quarterly, or semi-annually – may vary a lot depending in the size of the unit and project. In an Anaheim town-home community, for example, your dues can be $275 a month.

In a luxury condo building in Irvine, your dues could be $1,500 a month! It is all based on the requirements of the community. Your dues pay for the maintenance and add to the “reserve fund” in the community. The reserves for a financially healthy community are very likely to range from hundreds of thousands of dollars to millions of dollars for a luxury community at any given time.

When you buy a home, condo, or townhome in a community with an HOA, you’ll want to know how much the dues are. How much they will be in five- to ten- years is extremely hard to know, but there are some red flags to examine.

In particular, if the reserve fund is low, multiple homeowners are late, a major repair is required, owners might encounter an out-of-the-blue “special assessment” that will run you an additional $200 to $1000’s of dollars each month. In the long run, the vast majority of HOA dues will increase to stay on pace with inflation.

Why buy real estate with an HOA?
HOA’s can be a benefit and a burden. Homeowners are protected from loud neighbors, external decorations, illegal additions and property expansions, but they can also seem very strict. Make sure when purchasing real estate in an HOA community to have precise knowledge what you’re in for from day one.

An experienced realtor will ask the seller’s agent for the management company’s information; after that, you can review a copy of the CC&Rs, hopefully discover more information about reserves and dues, and even learn if the HOA has pending litigation or upcoming special assessments for it residents.

What You Need To Understand About Homeowner Associations

When you purchase a home in a Condominium Project or a Planned Unit Development (PUD), you generally have to deal with a Homeowners Association (HOA). And, this HOA can play a huge part in the look and feel of your home.

San Jose Housing Tract — Tract Housing in California

What Is A Homeowners Association?

An HOA is an institute that a real estate developer creates in an effort to improve, manage and sell the homes.

It lets the developer to get out of both financial and legal responsibility for the community, generally by transferring association ownership to homeowners after they sell of a predetermined amount of lots.

It lets the city to boost its tax base and decrease the services it would typically provide to non-homeowner association developments.

The majority of homeowners associations are assimilated, which mean they’re subjected to state statutes that pertain to non-profit corporations and homeowners associations.

There’s very little state oversight, usually taken in the forms of laws that are not consistent from one state to the next.

What Are The Positive and Negative Aspects of HOAs

HOAs have the power to dictate what color our home should be, the amount of pets you can have and what kind of grass that’s permitted.

They can also impose fines, dues and assessments – they may also collect a few dollars annually to ensure the grass is cut in common areas.

Covenants, Conditions and Restrictions (CC&Rs) set HOAs up and are included in your deed. The CC&Rs mandates the way the HOA works and what the guidelines are that must be obeyed by homeowners, guests and tenants. It’s important that you look what the CC&R guidelines are before you purchase a home to ensure it meets the lifestyle you want to live.

For example: If you own your business, the CC&R may dictate that your business is not allowed. If you have three dogs and two cats, you could be informed that only one pet per household is allowed.

Bear in mind that CC&Rs are just one part of the HOA.

Another part of HOA are bylaws, which must reflect the association’s intent.

HOAs have either a managing Board of Directors or third-party property management company.

Look at potential assessments.

For example, a Condo Association recently had an issue with foundation and assessed each unit member more than $10,000. Another PUD owned a pool that needed routine maintenance and be certified.

PUDs are usually set up in subdivisions with a homeowners association along with it.

The builder is generally the head of the HOA until completion of the subdivision. Once completed, management is then turned to the homeowners during a special membership meeting.