HOA – What is it? The Pros & Cons!
Written By: Miller and Associates Realty On: 24th October 2016 Under: Buyers, Listings, Panama City Condos, Panama City Subdivisions, Real Estate Market, Real Estate Tips
If you are considering the purchase of a condominium, townhome or a single family home within a gated or upscale community, you have probably come across the words “Home Owner’s Association (HOA).” For some, the idea of an HOA can be disconcerting or in some cases even bothersome. I often get asked what exactly an HOA is, what the fees cover and what do they do. Some clients often believe there is a stigma to properties with an HOA because the property has rules associates with ownership. So let’s go over the purpose of an HOA, how they are beneficial and what it means to an owner.
The overall purpose of a Home Owner’s Association is to oversee the continued maintenance of a community and to ensure that guidelines are in place to preserve the integrity of the properties and common areas within that community. The HOA is responsible for collecting a monthly, quarterly or annual fee from each owner to fund any repairs needed or generate a reserve account to support future improvements. Fees usually run 0 to 00 per month but this can vary amongst properties and the amenities they offer. Keep in mind, the larger the property and the more amenities to manage, the higher the HOA fee usually costs. Amenities can include landscaping, gates, pools and spas, fitness centers, theater rooms, tennis courts, pet curbing stations, picnic areas and green space and many more conveniences that enhance quality of life of the owners. The HOA is also responsible for the exterior and roof of the properties and we will cover that presently.
The HOA is also there to support the owners when questions and concerns arise. Homeowners should receive a prompt response to reasonable inquiries regarding the community or their individual property. The HOA must treat all owners with equal respect and allow timely notice for any infractions that may occur. The HOA will keep the owners informed on any updates and keep the minutes of each meeting readily available. They will also make sure all owners are informed of their voting opportunities if applicable in the by-laws well prior to the voting date.
A well-managed HOA will have a robust reserve fund established to cover or offset the expenses for maintaining the property. For townhomes and condos, this often includes servicing the elevators, painting of the exterior and reroofing the buildings when needed. Just recently, I spoke with the vice president of a condo association who told me a portion of their reserves would be used to repaint both buildings and for the purchase of new washing http://humanrightsfilmnetwork.org/diflucan machines and dryers for their laundry facilities. All of this and at no additional expense to their owners! In some cases, larger projects or multiple improvements may be needed for a community. If the reserve fund cannot fully support the estimates, the HOA will vote on an assessment to the owners to help split the expenses in order to not deplete the full reserve fund. This can be as little as a few hundred dollars to a few thousand so take your time reading the HOA financials and budget prior during the buying process. If you are purchasing a developer condominium or townhome, you will have a 15 day right to rescind your contract and 3 day right to rescind for a resale once you have been provided the budget, governances, rules and regulations.
So now that we have covered many of the benefits of an HOA, we can go over a few of the draw backs. Ownership in a community with guidelines is not for everyone. First, consider your own temperament. If you are someone who does not care for being told what to do, it may be beneficial to look for a property without enforceable covenants. A development with an HOA requires the owners to give up a certain level of freedom. HOA’s can dictate the color palette in which you may choose from to paint your home, plants and flowers that you may wish to landscape with, they can prevent you from renting your property and in some cases, they can fine owners for not landscaping well enough or even leaving their garbage cans by the road. Some prospective buyers may not wish to or be physically able to utilize the amenities provided and therefore may not want to pay a monthly maintenance fee for conveniences that they may not enjoy.
Over all, the goals of an HOA are geared toward the betterment of the community for property owners. Your Realtor will be able to help you search for properties that have the amenities you want and at the expense that fits your budget. They will also be able to provide you with the covenants and community guidelines and an HOA contact so that you can determine if the property you are pursuing is a great fit for you or your family. For more information about HOA’s or for listings in the Panama City Beach metro area, contact the Miller Team today!
Article Written By: Amanda Jermyn of Miller & Associates Realty, LLC.
