Lower HOA fees are not always better
Written By: Miller and Associates Realty On: 28th August 2013 Under: Panama City Condos, Real Estate Market, Real Estate News, Real Estate Tips, Uncategorized, Website Updates
A continuing trend when communities are being planned is the creation of a home owners association (HOA). The developer creates the association prior to the initial sale of homes, and the Covenants, Conditions, and Restrictions (CC&Rs) are recorded when the property is subdivided. Anyone buying in the community must abide by the association regulations.
HOA fees are the annual budget of the association divided by the number of people who own property in the community. Buyers of condominiums or homes with an HOA should consider what services are being provided for by the fees. Common examples are: landscaping, pool maintenance, security, pest control, insurance, water, sewer and management fees.
Buyers should review the budget of the association to help determine if the fees make sense for what is being provided. The budget should have at least two sections to review, the operating http://humanrightsfilmnetwork.org/accutane fund and the reserve fund. The operating fund simply covers existing or ongoing expenses like landscape contracts, pool maintenance etc… The reserve fund is money being set aside to repair or replace community assets like pools, tennis courts or the roof. If the reserve fund is too low or an asset needs to be replaced earlier than expected the association will increase the assessment or implement a special assessment on each owner to pay for the expense.
Generally communities that provide more services will have higher HOA fees than communities with minimum offerings. Low HOA fees can indicate efficient management or be a sign that not all future capital costs are being budgeted for. Use common sense when looking at budgets and remember that HOA fees should be realistic based on the number and level of services being provided. If you have any HOA or real estate question, please call Allen Place at 850-249-6655.
