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Eagle, ID 83616

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Homeowners' Association: What you Need to Know (Unpublished)

Posted by Kevin Hughes on (Unpublished)

So, what is an HOA and what are they all about? What do you need to know?

Boise Idaho's shrinking home inventory has prompted many to turn to new construction, and with budding neighborhoods come budding HOAs, an organization in a planned community or subdivision that creates and enforces rules for all the homes and properties within its jurisdiction. When you hear that, you're likely to form an opinion pretty quickly.

You'll find HOAs typically in a condominium environment, townhouse or any other type of property within a gated community or planned development, sometimes even an ordinary subdivision. If you purchase a home that falls within the web of an HOA, you are obligated to join and therefore pay monthly or annual HOA fees. This is when you step back, right?

An HOA fee may automatically seem like a negative, but if you consider that your money is going towards keeping and maintaining the area you live in, such as common areas, you may come to appreciate everything it can do for you. HOA fees are designed to keep the quality of life for the community's residents at a high, and to preserve property values. Both of these things are a major plus.

HOA fees do vary greatly, depending on the type of home you purchase and the area where it's located. You'll find that some HOAs are monthly or yearly, some higher or lower. The important thing is understanding, if you do find a home you like that falls within the confines of an HOA, that you know exactly what it entails before you buy. The rule is that the more upscale the building and the more amenities it has, the higher the fees will be. We'll take a look at what exactly you need to know before you buy into an HOA.

Learn the rules. You may be able to find information online, and if you do, make sure they're up-to-date. If you cannot find this information that easily, you can ask your real estate agent or call the HOA yourself. One thing you'll want to pay particular attention to are fines. Some HOAs can foreclose your property due to non-payment or accrued fines from violating any CC&Rs (CC&Rs-covenants, conditions and restrictions-are certain rules that all residents must follow). Find out if you can change or add rules and when HOA meetings are held if you wish to be able to attend. If you find the rules are too restrictive, you may consider buying elsewhere.

Another thing you want to watch out for is buying a home that is already out of compliance with HOA rules. You may find yourself walking into an existing problem, so find out what the rules are and what you may need to do to make the home comply. This is something your real estate agent will be able to help you with.

What are the environmental practices? There are some HOAs that dictate how you treat and care for your lawn. They may enforce the use of fertilizers, pesticides, sprinkler systems or whatever else they deem important to keep your lawn the picture of perfection. Certain things may not be permitted with the HOA. They may limit the size of your garden, disallow compost piles and so on. Whether these things are important to you or not, it's always wise to read the fine print. And again, HOAs vary. Some are much less restrictive than others.

With any HOA, it's important to consider what type of person you are. If you hate being told what to do, living in a community with an HOA might not be a positive experience for you. As you know, one of the major benefits to owning your own home is the liberty that comes along with it-the ability to change it to better fit your personal needs and preferences. An HOA can really interfere with this.

And of course, find out about the fees. When you're looking into it, consider the following questions:

How large is the HOA's reserve fund?

How often do increases occur, and historically how much have they been raised?

How are HOA fee increases set?

Find out what the fees cover. Does it include payment for things like water, trash pick-up, sewer services and cable TV?

Ask for a record of special assessments that have been made in the past and ask if any special assessments are planned for the future.

Has the HOA ever been sued?

Compare dues for the community you're considering buying into to the average dues of the area. If the community has amenities such as a fitness center or pool, you will have to pay for them whether you use them or not. There also may be rules about guests and their use of these amenities.

You can even request a copy of minutes from the last HOA meeting or ask to sit in on one. This can be very telling to the policies of the HOA. You'll do well to know what, if any, current conflicts there are and what has happened in the past, and what their process is of solving conflicts. While we'd like to think that HOAs are devoid of drama and petty politics, it can still be an issue. It can be particularly helpful if you can talk to some of the building's current owners-ones who aren't on the board. HOAs can be managed by a private company or by building residents who fill the position as volunteers. Either way, you don't want to end up getting into something you didn't bargain for.

In addition to finding out who manages the association, find out what the rental situation is like. Some associations refuse to let owners rent their place for more than 30 to 60 days, if at all.

What are the amenities, parking and pet restrictions? Check out what the hours of use are for pools, spas and recreation areas such as tennis courts to see if they work with your schedule. Some associations have pet restrictions. Find out what those are.

Consider the financial impact of HOA fees on both your short and long term finances. For example, a condo with high HOA fees may just end up costing you as much as that dream house you thought you couldn't afford.

Homeowners' associations can both fill the role as your best friend, or your worst enemy. There are many pro's and con's involved with any HOA. The bottom line is that it's more important than ever to be well acquainted with the HOA rules and fees before it's too late to go back. Your agent will be a great asset to you if you're deciding to buy a home that is subject to rules.

Hughes Group is always available at 208.571.7145.

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