{"id":12542,"date":"2010-03-28T11:57:50","date_gmt":"2010-03-28T17:57:50","guid":{"rendered":"http:\/\/template.lenderama.com\/?p=680"},"modified":"2010-03-28T11:57:50","modified_gmt":"2010-03-28T17:57:50","slug":"hoa-hurdles-to-be-aware-of-when-looking-at-new-properties","status":"publish","type":"post","link":"https:\/\/dev203k.orbitwebx.com\/dev203k\/hoa-hurdles-to-be-aware-of-when-looking-at-new-properties\/","title":{"rendered":"HOA Hurdles to be Aware of When Looking at New Properties"},"content":{"rendered":"

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A Home Owner Association <\/a>(HOA) can have a huge impact on your life when you buy a home in a PUD (Planned Unit Development) or Condominium Project.\u00a0 We will discuss some HOA hurdles to be aware of when looking at new properties.<\/p>\n

According to Wikipedia<\/a>:<\/p>\n

A homeowners’ association<\/strong> (abbrev. HOA<\/strong>) is an organization created by a real estate developer for the purpose of developing, managing and selling a development of homes.<\/p>\n

It allows the developer to exit financial and legal responsibility of the community, typically by transferring ownership of the association to the homeowners after selling off a predetermined number of lots.<\/p>\n

It allows the municipality to increase its tax base, but reduce the amount of services it would ordinarily have to provide to non-homeowner association developments.<\/p>\n

Most homeowner associations are incorporated, and are subject to state statutes that govern non-profit corporations <\/a>and homeowner associations.<\/p>\n

State oversight of homeowner associations is minimal, and mainly takes the form of laws, which are inconsistent from state to state.<\/p><\/blockquote>\n

The Pros and Cons of HOA’s:<\/strong><\/p>\n

A Home Owner Association may have the power to determine the color of your home, the number of pets you have and the type of grass you have to plant.<\/p>\n

They also may have the power to levy assessments, dues and fines.<\/p>\n

Or, they may be as simple as collecting a few dollars per year to make sure the grass is cut in the common areas.<\/p>\n

HOAs are set up by CC&Rs (Covenants, Conditions & Restrictions) and become part of your deed.<\/p>\n

The CC&Rs dictate how the HOA operates and what rules the owners, tenants and guests must obey.<\/p>\n

You should take the time to review the CC&R for any prospective purchase to make sure that the home you are buying will be right for your lifestyle.<\/p>\n

For instance, if you operate an Amway business from your home, it is possible the CC&Rs prohibit this type of activity. Or, if you have two dogs and three cats, the CC&Rs may limit you to one pet.<\/p>\n

The CC&Rs are only a portion of the HOA.<\/p>\n

Bylaws are another component of HOA’s that reflect the intention of the association.<\/p>\n

Each HOA either has a managing Board of Directors, or a third-party property management company.<\/p>\n

In some cases, the cost of the management is higher than the cost needed to perform the requirements of the association.<\/p>\n

One issue to be sure you check on is potential assessments. <\/strong><\/p>\n

For instance, recently a Condo Association had a foundation problem <\/a>and were assessing the members over $10,000 per unit.<\/p>\n

Another PUD had a pool that required routine maintenance and certification.<\/p><\/blockquote>\n

How Is Deferred Maintenance Handled?<\/strong><\/p>\n

Subdivisions are commonly set up as PUDs with an additional HOA.<\/p>\n

Until the subdivision is complete, the builder is generally in charge of the HOA.<\/p>\n

When complete, the management of the PUD will be turned over to the homeowners at a special membership meeting.<\/p>\n

It is a very good idea to attend this meeting because a board will be chosen at that time.<\/p>\n

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Related Articles – Home Buying Process:<\/h2>\n