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What You Need to Know About Homeowners Associations

Documents about Homeowners Association HOA on a desk.Buying a new home is an exciting time in your life, but it’s a process that often comes with challenges and many questions.  This can be especially true if you’ve purchased your first home within a planned development, subdivision or condominium that requires you to join a homeowners association (or HOA).

Currently, there are more than 351,000 Homeowners associations in the U.S. that represent 53 percent of owner-occupied households in the country. If you’ve never owned a property in a community with an HOA, you may well be wondering what exactly it is, why it exists, and what it will mean for you.

Investors Title Company is here to distill the essential must-knows on HOAs to help you make the best home-buying decision possible.

What Are Homeowners Associations?

Homeowners associations, also referred to as a “subdivision trustee”, are comprised of a community’s residents and include a board of directors to help enforce a unique set of rules, the strictness of which varies by community.

These rules are typically outlined in a document called the Declaration of Covenants, Conditions, and subdivision restrictions. Restrictions vary by association, but primarily the policies deal with exterior features of the homes. Regulations may pertain to a property’s landscape, fences, porches, paint colors, pet ownership, noise, or other items. The purpose of these regulations and the reason many neighborhoods establish an HOA is so that all homes within the community can better protect their property values. After all, many buyers will pass on a home not because anything is wrong with the property itself, but because the neighborhood is not desirable.

Though some may balk at the thought of their neighbors having control over what they can and cannot do with their home, there are benefits to HOAs. First and foremost is that protection of your home value. On top of this, many associations have shared amenities like pools, clubhouses, sports or gym facilities and other luxuries that you may not be able to afford on your own but are covered by your member dues.

It is important to carefully review your HOA’s documents prior to purchasing a home, as HOAs may fine or take away community privileges from homeowners who are noncompliant with the restrictions and or indentures.

What are the Differences Between a Villa and a Condo ?

Two types of properties that will nearly always have an HOA are condominiums and villas. While these are similar styles of property, there are some important differences to note.

A condominium is single unit ownership. You own your own unit but typically will pay a monthly condo fee that covers maintenance and the operation of any common ground or communal areas. Your ownership of the condo unit does not include any ownership of the common areas, but it does provide you with access to them.  Usually, you can paint and do some renovations to your unit based on prior approval from the board of managers of the condominium.

A “villa” generally refers to a one-level structure and is often more secluded or private than a condo. Most will include an exterior patio, front garden, or terrace. You may find a villa development to include a swimming pool, tennis courts, or a clubhouse provided to the residents of the community.  The homeowners association is generally in charge of the maintenance of the community and will have either monthly, semi-annual, or annual fees associated with their service.

How Do Homeowners Associations Affect Your Property?

The presence of an HOA can greatly affect your home value. Because of its requirements related to home and exterior maintenance, HOAs can enhance a home’s exterior appeal, which is a benefit to the neighborhood. Higher standards of living translate to higher home value and attractiveness of a community.

Living in an HOA community is not for every homebuyer, so it’s important to carefully review the regulations and requirements if you are considering residing in one of these zones. If you don’t agree with an HOA’s requirements or have not accounted for the monthly dues in your budget, you may want to consider exploring a community without this feature.

As the leading St. Louis title company, we are committed to educating and caring for our customers. Whether you are in need of residential or commercial title services and guidance, the team at Investors Title Company is here to help.

Are you looking to work with title experts with unmatched industry experience? Contact Investors Title Company today.