Homeowners' associations (HOAs) are great for making sure your neighborhood stays safe, clean and respectable. However, HOAs, with their fees and other requirements, can also represent a serious difficulty and challenge for certain neighborhood residents. As such, before you purchase a property in a neighborhood with an HOA, you'll want to understand everything you can regarding the HOA -- especially when it comes to the fees you'll be required to pay.
Here are a few questions to ask to make sure that you fully understand the HOA fees in your neighborhood:
- What is the current HOA fee requirement?
- How does the HOA decide to increase fees?
- How often does the HOA implement fee increases, and what is the history of fee increases? Make sure to obtain a history of HOA fees going back the last decade.
- How much reserve funds does the HOA possess?
- Can you obtain a record of past special assessments?
- What special assessments will be planned in the upcoming future?
- What does the HOA spend the monthly dues on?
- Are garbage pickup, cable and other benefits included in the HOA fees?
- How do the HOA fees compare to other HOA fees in your area?
- Do you have to pay extra for use of recreational facilities like pools and tennis courts?
- Can you bring guests to the pool and tennis courts, and what are the guest restrictions?
Knowing the full scope of the homeowners' association fees and rules relating to a particular community will help you determine if the neighborhood is right for you and your family. Be sure to understand what you're getting into regarding HOAs to avoid the potential for future legal problems.
Source: Investopedia, "9 Things You Need to Know About Homeowners' Associations," Amy Fontinelle, accessed Feb. 23, 2018