How to Understand your New Home HOA
When you’re building a new home in a master planned community there’s a very good chance it will have a Homeowners’ Association (HOA), also sometimes referred to as a Property Owners’ Association. An HOA is a regulating entity that makes rules and regulations specific to the community. The HOA is also in charge of maintaining amenities and enforcing the rules.
Living in an HOA can be highly beneficial, but there may be a few drawbacks. Before buying it’s important to know everything you can about the HOA because it can affect how you build as well as the cost of owning a home.
Request the HOA Governing Documents
If a home will be within a required membership HOA, then an HOA addendum must be part of the purchase paperwork so that you are aware of it. Before closing on a home within an HOA (whether you’re building or buying a resale), you have the right to request a copy of the HOA governing documents.
The rules and guidelines of the HOA are laid out in the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). It’s highly advisable that anyone buying within a required HOA read through every page of the CC&Rs. Some of the most important points to know are:
- The appearance guidelines for the exteriors of homes
- A process to request making changes to the exterior
- HOA dues
- How the HOA is managed
- Bylaws that explain board elections and terms
- Rental restrictions
- Pet restrictions
If you have any questions or something isn’t clear get clarification. Your real estate agent is a valuable resource in helping you understand the legal aspects of an HOA and obtaining documents. Keep in mind you may have to pay a fee to get the documents or negotiate to have the seller pay for them.
As a homeowner in an HOA, you have the right to access records and documents as well. The HOA is obligated to make documents accessible. You also have the right to copy the documents for review.
Ask About the HOA Dues
Most homeowners enjoy having an HOA, especially if the associated dues are reasonable. Dues vary from one HOA to the next, and there are no regulations specifying how much an HOA can levy in dues. Before completing the sale ask:
- How much the dues will be.
- If the dues amount is set for a specific period of time.
- When the dues must be paid.
- How dues are paid.
- If there’s a potential for one-time special assessments.
- What costs the HOA dues cover.
One caveat of HOA dues that is extremely important to understand is that failure to pay could lead to the association putting a lien on your home. If that happens foreclosure is a possibility, although this usually occurs only after serious delinquency. And you have a redemption period after an HOA foreclosure to repay the late dues along with any other fines and related fees.
All this is spelled out in the HOA’s governing documents, which is one more reason why it’s important to read through them in their entirety.
Know the Legal Powers of the HOA
In Texas, HOAs have certain legal powers – one of which is the ability to issue a lien for non-payment of dues. Both state law and the CC&Rs for the association dictate the legal powers of an HOA. You’ll want to know what these powers are and when they apply.
Rules that regulate HOAs are spelled out in Title 11 of the Texas Property Code. If you’ve never lived in a Texas HOA before you’ll want to look theses rules over so you have a better understanding of the HOAs legal powers and your rights as an owner.
Becoming a Part of the HOA Leadership
There’s no better way to learn all the ins and outs of an HOA than becoming a board member. As a member of an HOA, you have the ability to join the HOA board of directors. Being a board member gives you more say in shaping the rules and how they are enforced.
First, look up the bylaws for the HOA, which describe what the board does and how members are elected. Typically, board members are elected by the HOA homeowners and elections are held once every year or two.
Next, you’ll want to understand the obligations and fiduciary duties of the HOA board members. Go to an HOA board meeting or see if there’s an annual schedule available to find out how often board meetings are held. Talk to a few board members to get a better idea of their general responsibilities and the time commitment involved.
At myHouseby we make it easy to find communities where you can build your dream home within an HOA that helps maintain the rest of the neighborhood. Use our marketplace to answer a few questions and discover with the perfect community for you!