When you buy a home in a condo or a gated community, you will more than likely have to deal with a homeowners association (HOA). If you buy a home in a neighborhood run by an HOA, it is mandatory that you join the HOA and follow its rules. The primary purpose of these types of organizations is to help you retain value in your home and be able to sell at the highest possible price. But sometimes an HOA can cost you a lot of money and make you question whether or not you are actually making a profit when you sell.
Most communities run by an HOA have added amenities such as in-ground pools, a workout facility, and a community gathering building. The maintenance and repair for these common areas is handled by the HOA, and the residents are given a monthly bill for the expenses. These expenses also include landscaping, snow removal, ice removal, and leaf removal. The maintenance and repair of the common grounds is part of a monthly fee every resident must pay.
Maintaining A Condo
If you are moving into a condo with an HOA, then your HOA is also responsible for maintenance and repairs to the roof of the building, the common stairways, the elevators, and all other common features and amenities. If you are moving into a place with its own tennis courts, movie theaters, and video game arcades, then you can expect a pretty high monthly HOA fee.
Raising Fees In Times Of Crisis
The hope is that the money collected each month in HOA dues can just continue to grow and create a large fund in case of a major repair. But if there is $10,000.00 worth of damage to the community room roof and there is only $5,000.00 in the HOA account, then you can expect the HOA to hit all residents with an extra fee to immediately make up the difference. If there are 25 residents, then every resident will receive a bill for $200.00 that would be due immediately.
One area where an HOA can impact your long-term expenses can occur when you decide to remodel your home without using the HOA guidelines. Every HOA has specific guidelines on how homeowners can remodel their homes, including the colors that are allowed and the materials that must be used. If you violate these guidelines, the HOA can force you to undo your work and have it done properly or you will be fined.
An HOA is an organization that helps to maintain certain types of communities and make sure that property values remain as high as possible. In order to do its work, the HOA has to charge residents a monthly fee. If the HOA financial reserves are not enough to cover a repair job, then an emergency bill goes out to each residents that must be paid. In the long-term, trying to keep up with the requirements of an HOA can become extremely expensive for any homeowner.