HOA or homeowner association is an organized structure to maintain, manage, and offer consistency within a particular neighborhood. Most developers and builders when constructing and building out a development will have a homeowner’s association or HOA in order to keep things consistent such as home colors, certain requirements, bylaws, and maintain common areas.

“Not all subdivisions have an HOA but most new subdivisions do and over the decades, they contend to fizzle out. However, some HOA’s will have a variety of amenities on-site or within the community that needs to be constantly maintained, hence you’ll probably always have a homeowner association for this purpose” Says Scott Startsman, Honolulu Real Estate Expert

HOA’s can be member-owned or it can be management from a property management company. Typically, condo associations will have an HOA managed by a property management company and condo owners will send their monthly association dues to the management company. These dues will help facilitate any repairs, replacements, special assessments, and management of the community. So what should you know about an HOA before moving in?

#1. Understand the fees

If you’re moving into a community or a condo complex that has an HOA make sure you understand the fees and what they are used for. This will need to be part of your housing allotment so if you are applying for a home loan, you’ll need to consider this in your housing payment. Some association fees can be built into the mortgage payment with taxes and insurance while others need to be paid separately. When determining how much home you can afford on a monthly basis, don’t forget to include these association fees if necessary.

“Ask what these fees cover. Will there be special assessments for larger projects such as landscaping, replacement of swimming pools or community centers, and what the reserves are like. The last thing you want as soon as you move into an association is to be hit with a special assessment and now oh twice or even quadruple the monthly fee just to cover the special assessment.” Says Kris Larson of Best Utah Real Estate

#2. Understand the bylaws and restrictions.

All associations will have what’s called CC&R’s, which stands for covenants, conditions, and restrictions. All buyers will receive this document either when making an offer or after the offer is been accepted, usually you have the choice. It’s important to go over these bylaws and regulations so that you adhere to them and understand them. If you want to paint your house a bright green in the near future that’s probably not allowed under the Association. Other factors such as fence height, garbage cans out front, parked RVs or boats, and what you can or can’t do in the community is all laid out in the community guidelines to make sure you agree with them before moving forward on an offer.

#3. The HOA reputation.

“Before finalizing an offer talked to a few of the neighbors about the homeowner association and how they feel it is run. Doesn’t have a good reputation of listening to its members and homeowners? Who runs the HOA and how are differences handled, conflicts, or litigations? How often does the membership meet and how much input does the Association value from its homeowners? If all of the neighbors are disgruntled with the HOA, chances are you probably will be to in the near future.” Says Pam Pester, Tampa Bay Tenant Rep

#4. Insurance issues.

Many associations carry their own insurance, that can cover accidents, injuries, or issues arising from common area amenities or even differences between homeowners. Catastrophe insurance is particularly important if you’re considering a condo or townhouse and earthquake insurance is one of our biggest things. Talk about the insurance, ask about insurance requirements, and how protected the Association and complexes.

#5. Consider getting involved.

The best way to understand the Association or to change anything is to get involved. If homeowners can become members of the Association, consider getting on the board and while you might not have to do too much, you will have a say as to the process and future of the Association. Many members can get together and dissolve the Association if they feel it’s not worth the money they are paying each month. If the Association is not maintaining any amenities and simply managing the comings and goings of neighbors and policing people’s front yards, you may have a say in dissolving the Association altogether. Being involved means you have a say, you can control where the Association goes, and you have a better handle on where you live.

There are a lot of associations across the country but finding the right one for your needs might be a bit of a challenge. You may love the home and love the price but the Association may not work for your lifestyle. If you have particular concerns about an HOA talk to your real estate agent. He or she can help distinguish the difference between homeowner associations and help you find the right property in the right neighborhood.