By Ken Reetz
Home Owner Associations are formed to preserve the value of a community. The intent is to keep all properties true to the original design concept and properly maintained on the exterior. This includes landscaping.
In addition, the HOA will have rules and restrictions that promote “good neighbor” policy; rules that affect parking, excess clutter, noise, and so on. There are usually forty to fifty pages of regulations and policy to explain what is expected.
The HOA has legal authority to impose a fine when an owner disregards the rules, and finally may lien a property when an owner fails to pay fees or fines. With this in mind, it is important for all property Buyers to review carefully the CC&Rs (Covenants, Conditions & Restrictions) when considering a purchase into a community that is governed by an HOA. Go steps further by reviewing the Meeting Minutes, Financials, and anything else that will help you know the community better.
It takes time to perform due diligence, but it needs to be done – you want to know if there are Special Assessments, Legal Issues, Deferred Maintenance, and/or other considerations that might affect your enjoyment of the community and future financial obligations.
The property value and marketing value can be affected by how well the HOA is managed; if the HOA is not well managed you may find it nearly impossible to sell your home in the future, an interested buyer may not be able to get financing if the HOA has issues with:
- Low cash reserves
- High percentage of delinquent association fees.
- Inadequate insurance coverage.
- Too many rentals.
There is a temptation to relax due diligence when the address has a higher prestige; resist doing so because serious issues can lurk anywhere. I’ve seen it firsthand more than a few times. Aside from that, even the best run and highest regarded HOA community will have CC&Rs – there may be some restrictions or limits that you just don’t want to live with.
Any benefits of the HOA depend upon matching your expectations so it should have the same scrutiny as the Home Inspection or the financing – all having long term implications.
Some buyers avoid HOA neighborhoods because of all the approvals the owner has to go through in order to do simple exterior paint, new roofing, or even certain yard work – or they may resent the pesky rules that won’t allow certain behaviors. They want the freedom to paint whatever color they choose and to leave the garbage can in front for a few days without being hassled.
Just remember that whatever unabridged freedoms you wish to have will also exist with your neighbors; there is definitely a possible upside or downside to both HOA and non HOA neighborhoods. Whichever you choose, choose wisely.
If you need help buying your next home, especially first time buyers, just give me a call and I’ll be happy to help. My services are free to buyers: Ken Reetz, Principal Broker, Oregon Real Estate License, #200409337, (503) 330-4148, ksreetz@gmail.com
The post Beaverton Real Estate: Buying a House in a HOA Community appeared first on Beaverton Resource Guide.